Interesting Thoughts on Investments

Today read an interesting post on Richard Russels website Dow Theory Letters. Some basic thoughts that we seem to have forgotten along the way as stock markets soared to dizzying heights and the trend spotters were predicting it to grow to infinity. I am sure there will be very few in the world who would not have burnt their hands in this melt down.

Here are some thoughts from Richard (nothing that i have written myself)...for details please visit the site..

Rule 1: COMPOUNDING
Start early, invest regularly...

Rule 2: DON'T LOSE MONEY
If you want to be wealthy, you must not lose money, or I should say must not lose BIG money. Absurd rule, silly rule? Maybe, but MOST PEOPLE LOSE MONEY in disastrous investments, gambling, rotten business deals, greed, poor timing.

RULE 3: RICH MAN, POOR MAN
In the investment world the wealthy investor has one major advantage over the little guy, the stock market amateur and the neophyte trader. The advantage that the wealthy investor enjoys is that HE DOESN'T NEED THE MARKETS. I can't begin to tell you what a difference that makes, both in one's mental attitude and in the way one actually handles one's money.

RULE 4: VALUES
The only time the average investor should stray outside the basic compounding system is when a given market offers outstanding value.