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The 5 Golden Rules of Investing Success

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In this exclusive article Clem Chambers, Forbes columnist and author of the Amazon No.1 investing bestseller 101 Ways to Pick Stock Market Winners,  discusses the five golden rules to help you start trading successfully.

 

The 5 Golden Rules of Investing Success, by Clem Chambers.

 

Incisive, honest and essential, Clem Chambers’ 101 Ways to Pick Stock Market Winners is the Amazon-bestselling investing guide.

There are many more people watching share prices than investing in stocks. Most realise that investing is the way out of living from pay check to pay check, but do not know where to start.

Stocks and shares seem to be the reserve of the rich; a risky business where the novice loses their shirt. But there must be away to get started without getting burned?

Here are five rules to stock market investing success to get you started.

 

Rule  1Build a stock portfolio of 30 shares.

Take no notice of the people that say put all your eggs in one basket. A portfolio gives you a certainty that bad luck won’t hurt you and that your choices on average will deliver the return your share picking deserves. This portfolio return over the years will outperform anything a bank will offer you on deposit and will compound.

A diversified portfolio will mean you will miss out on good luck, but investing isn’t about good luck. Bad luck and good luck cancel out over time but if you have too much of your money in too few shares then bad luck can knock you out of the game.

 

Rule 2Until you own at least 30 different shares never buy more than £1000’s worth of any share.

Risking too much on any stock investment is a recipe for disaster, even for the sophisticated stock market investor. Keeping your individual share investments small keeps your capital pot safe and lowers the stress that can make investing unpleasant. Once you have 30 stocks you can grow the scale of each investment, but until that day stay small.

Rule 3 – Get online and get the stock picking tools of modern investing.

A free ADVFN account provides investors with free stock market tools that a few years ago would not even be available to the professional fund manager;

    • Real time share prices.
    • Fundamental information.
    • Portfolio tracking.
    • News.
    • Opinion.
    • Many more free services!

These free services let you make highly informed financial decisions on what share to buy and when to sell them.Researching your stock market investments might seem like work. That is because stock market investing is work.

Sadly investing is not a short cut to wealth, you need to treat it like any other way of making money -with focus and determination. Hopefully you will find it a lot of fun and more like a pastime than a chore.

Rule 4  – Always pick stocks using charts.

There will always be new ways to make money using charts and over time they will stop working. This is the way it is with markets.

To be successful you need to be constantly on the lookout for new methods; old ones are always eaten away by the efficient market. To make gold you must slowly destroy your philosopher’s stone and then make another.

 

Rule 5 – Invest in shares for the long-term.

Buy shares you think you will hold for three or more years. Do not make your broker rich and yourself poor by trying to trade. When the world’s most successful investor, Warren Buffett, claims sloth as his most profitable investing trait you should take note. Slow and steady wins the stock market investing race. Value investing is a great skill to learn.

Put your investing money in a SIPP or ISA and let the profits roll up tax free. While interest from the bank is taxed, using these tools can protect your stock market profits and dividends from tax; one more reason to let the long-term take hold.

Just remember, by the time you can afford a Ferrari from stock investing you will be too old to want one. You think that’s bad? Perhaps you should wonder if you have any other way to get Ferrari rich at all, before you worry how long it will take.

If you can see stock market investing as a part time job from now until retirement you will do very well indeed from it; it is the short-term forex and share traders that get burnt.

If you register with ADVFN, you will receive a free, easy to follow guide on ‘How to Invest’.

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.

Comments

  1. Winnie the Merde says:

    lovely jubbly. 30 shares and then work down as you work it out IMV.

  2. Bob the Hunter says:

    Point number one is important. Do your homework. I use StockMarketEye, but supplement that with sites like ADVFN, Yahoo Finance and MSN.

  3. HButler@pol.net says:

    MarketWatch.com: Yale Unconventional?

  4. Dufus says:

    “Bob the Hunter”? Whaaaaaaa,ha,ha,ha…

  5. Edward Choo says:

    If you don’t trade frequently, when the market is good, how to increase your money?

  6. lee says:

    Forget stocks long term. Long term diversity is in Gold and Silver.

  7. badboy says:

    Very sound advice, all five rules really make sense.

  8. Hsinglin Wang says:

    if only the author know what/she was talking about.

  9. Marcus Luccius says:

    Hsinglin Wang
    If you have something to say then say it my friend otherwise whaqts the point in your post ?
    All the above rules makes pure sense ,if you dont agree with it then by all means write about it dont just say “if the author had any idea ” sort of thing

  10. Gregg says:

    stock investing is a form of complicated gambling…

  11. Rip it up start again says:

    each share is 3.5% of portfolio

    is this buy/hold stop/loss rule doesn’t apply?

  12. Cowboy says:

    Everbody wish to be rich!

  13. Steve says:

    Good Advice from the Author. But some timing is needed, as to when to be in or out of the market. Suggest using long-term moving average, e.g., 200+ days, as indicator of when to buy or sell.

    Despite all the scams and manipulations which occur in the stock and commodity markets, it’s possible to make decent profits without getting getting gray hair from constant worries (as figured out after 10+ years of stock chasing)
    a. Keep at least 10-20% of your investment in physical gold and silver, which you can easily access. This is an insurance policy, especially since all major currencies, except maybe Chinese Yuan, are shaky and constantly devaluing. (Wait until the the present downturn ‘correction(!)’ is finished).
    Except for speculation, avoid ETFs such as GLD and SLV which are run by JP Morgan and other big banks. Too many uncertainties and possibilities to scam individual investors.

    b. Buy dividend-paying stocks, especially those which have long-term history of raising dividends, and DRIPs. Most outperform the S&P 500 over the long term. Recommend subscribing to newsletters on this subject from reputable authors, e.g., from Newsmax, Stansberry & Associates, Weiss Research, Agora Financdial.

  14. Dan says:

    Warren Buffet´s portfolio has 38 positions, with the top four accounting for 69.5% of the portfolio´s holdings. He´s done pretty well. I´m no Buffet, but it is easy to see what his “core” holdings are, three of the four are very long time holdings, only IBM is new.

    Coca-Cola 20.1%
    Wells Fargo 19.4%
    IBM 18.6%
    American Express 11.4%

    A person doesn´t need to own what Buffet owns, but I like his approach, and I have done well. The trick is identifying the long term trends and choosing a worthy mount. My portfolio is comprised of dividend cash cows, dividend growers, growth stocks and gold. Thirty stocks is too many IMHO. I own 20 plus gold, which I find easy to manage.

    Work out an investment plan that takes emotion out of the decision making process, and develop the discipline to work the plan. It´s much easier said than done! Been there. Patience and discipline are other secrets to investing success.

    That´s my two cents worth.

  15. William says:

    Doesn’t anyone cost average?

  16. did ley squat says:

    don’t take advice from anyone, including this author, the comments, including mine!!!!!!!!!!!!

  17. smitty says:

    Warren Buffet said “Put all your eggs in one basket, and watch the basket very closely.” 30 plus stocks is not a part time job, if you are going to manage your own portfolio. Drips, patience, discipline, and don’t follow the herd. Plan your work and work your plan!

  18. It' me says:

    Warren Buffet said “Put all your eggs in one basket, and watch the basket very closely.”

    No he did not, Andrew Carnegie did though

  19. Tommy d says:

    “Diversification is a hedge for ignorance.” – Warren Buffet

  20. Brianboru says:

    10 Copper Plated Rules for the small investor: -
    1.Maintain Cash reserve say £30K+
    2. Select 5 favorite blue chip stocks EG from FTSE 100 UK
    3.Wait for significant drop in share price
    4. Now buy low and sell on reaching 10% gain (don’t be greedy)
    5.Check out “Record” dates & attempt to trouser dividend on top of capital growth)
    6. Don’t play with less than £5k per share
    7. Be prepared to keep for 3+ years & don’t sell until the 10% made
    8. Pay no heed to the doom & gloom news, the market will respond otherwise.
    9. Must have on-line dealing facility
    10. Enjoy the thrill

  21. Brad H. says:

    Clem,

    Rules 1, 2 and 4 are decent. On the whole tho, it’s jibberish. If you knew anything about the current state of affairs on Wall Street and with global gov’t balance sheets, you’d know the rules for successful investing are very different now. Sure, dollar cost average dividend stocks up until the next crash. There are warning signs all over, but the novice investor has normalcy bias in a big way. Just ask those to preached about how great a long term investment Citigroup was. Dow to Gold ratio 1:1 people. Personally, I’m in silver, gold, real estate and cash on the side for playing some equities when the next big crash comes. Please read both sides of this financial story and do your homework. Good luck to you.

  22. Matt May says:

    Article seems more pontification than rationalization. Useless!

  23. Rufs Dogg says:

    Dreadful advice from both the author and most posters.

    If you really want to know what to do and how to do it, follow the true masters: Warren Buffet, Charlie Munger and Jeremy Siegel – people like that.

    Read read read what they have to say. They got rich by “doing” and they make no secret of their methods. Not only are they great investors, they’re terribly entertaining too.

    When you invest yourself, compare and contrast what you would naturally do with what they would do, and when you make mistakes (as everybody does) examine the mistake to make sure you understand what you did wrong.

  24. JohnGalt says:

    Rule #1 RUN !!!!!!!!!!!!!!!!

  25. Naeem says:

    I follow none of the author’s rule. I make $300-500 a trade and get out. Then I buy again at the right time , the same or diferent stocks. Average of two to four trades a month gives me a decent return 12-15% annually. Itried the buy and hold approach for a number of years and averaged 3.4 % in 5 years. Do onot fall in love with any stock. Buy , make some money and sell. You can always buy it again as it drops and sell again when it rises. I sometimes buy and sell the same stock 4 times a year.
    Yes , this is part time activity only and I never own more than 4 stocks at a time!!!

  26. D A L says:

    –”Risk comes from not knowing what you’re doing” – Warren Buffett
    –”You only have to do a very few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett
    –”Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” – Warren Buffett

    After reading this for what I thought would be a gentle reminder of the basics starting the New Year. However every Investor obviously has thier own style of investing however a few things I thought would need straightening out.
    “If you can see stock market investing as a part time job from now until retirement you will do very well indeed from it” – I agree with you on one point, short term are more frequently burnt. However you have forgot full time here. Infact short term/part time will be burnt much more frequently than full time. The market can change in an instant, if you only watch it part of the time then expect to lose money.

    Rules 2 & 3 – 30 companies is too large a portfolio to have any good luck as you said. This actually just reminds me of throwing your money into a bank for a fixed % every year.

    Finally the thing which hit a nerve for me “Just remember, by the time you can afford a Ferrari from stock investing you will be too old to want one” – This is in by no way fact, If you are doing it right obviously.

    Brianboru: I have edited some of your rules ever so slightly.
    1.Build cash reserve with targeted widthdrawl points.
    3.Wait for significant drop in share price – THEN CHECK WHY IT DROPPED!!
    4.Buy low and sell reaching 6-120,000% gain(personal preference)(NEVER be greedy)
    6. BE AWARE OF YOUR BREAKEVEN/PROFIT WHEN INVESTING LOWER AMMOUNTS!!
    7. Don’t sell until the 10%, Also never take that advice, ever. EVER!
    9. Must have on-line dealing facility – It does help but is not needed.

    Now here would be my simple RECCOMENDATIONS:

    Reccomendation 1:
    Knowledge is power. Know the company or product you are investing in. Research, Research, Research. If the price has dropped 20% do not buy out of instinct. Have the knowledge that the price will recover. I will use TALV during nov 5th – 14th leakage panic as an example. Yes there was money to be made here however premature buyers would have made a loss on this. Patience is not only a virtue but a key skill.

    Reccomendation 2:
    Don’t be greedy & Don’t be conservative. Be both! You will have to be decisive in this game. Know when to cut your losses, knowing when to cash in your chips and knowing when to hold. The trick to maximizing profit is to not have a time limit. If you set your target as a day, week or year you could be cutting out some of your biggest potential profits. Sell when you have made a profit which you are happy with and stay happy. Yes, if you had held it for an extra week you could have made 10% extra. However the swing goes both ways and most people tend not to think of it if they held all of thier shares for an extra week, how would thier balance look then?

    Reccomendation 3:
    Be willing to LOSE YOUR MONEY *note to reader – being willing to lose and throwing your money away are different things*. I reccomend beginning with an ammount which you are comfortable in losing if all goes pear shaped. Whether that be £1k or £10k is your choice, however the lower the investment the harder it becomes to make profit.
    The reason I say this is for one reason; people who become emotional in regards to thier investments will generally make bad choices. Not every investment you make will be successful and the sooner this is realised the better. Refer back to quote 2 & 3 and then consider this also;
    “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” – Warren Buffett

    Reccomendation 4:
    Do it your own way. Whilst everyone has thier own different styles you need to find yours. Please do not follow rules, they are made to be broken. Take what you think makes sense from many many sources and find your own way of trading. Then you will be successful.

    Pro tip #1 – Learn everywhere you get the chance. Mistakes are there to learn. Yours and everyone elses.

    Pro tip #2 – Setting goals is key

    @Naeem – Good post.

    Right back to my new years day.

  27. D A L says:

    In Hindsight I realise proof reading would have been of benefit when drinking scotch.
    :)

  28. Naci Yilmaz says:

    I disagree with 30 shares. It should not exceed 10 shares and each share should be 20% of your total investment. Never do long-term investment in stocks. Sell losers. If stock goes down buy incrementally and if it goes up sell incrementally.

  29. RC says:

    All commentary is good advice. Well done!

  30. Sayz says:

    Good job dear. However, one is free to take the advise he needs and trash the rest. One love

  31. Richard Brown says:

    Electric trikes in asia and scooters is where the action is “Hot Tip”

  32. Inthe Money says:

    Rule no 1 : Forget it. Institutionalised gambling manipulated by corrupt market makers and financial corporate numpties (scratch each others backs) who’ll manipulate you with the cash you give ‘em ……

  33. henli1000 says:

    People have to realize that Buffet trades the way he does because his portfolio is too big. He can’t just buy one stock because he has too much money. He can’t just go in and out because he has too many shares.

    As an individual investor you have much more flexibility, and that’s your main advantage. Anybody who suggests taking that advantage away from you and trading like Buffet probably wants you to sit in a stock and be their back holder.

    To be successful, you just need a few things:
    1) Cut your losses. I cut at 2-5%. 10% tops if I really love somethings, but this happens rarely. Initially you’ll find yourself getting kick off quite off quite often. Admit that you suck and keep trying. This forces you to be good on your timing.
    2) Focus on what you know. I only trade a few setups, because I am good at it and know how to deal with gains and losses. Some people only trade a few stocks. If you don’t know anything, pick one and stare at it. You can deal with large and focused position if you have discipline.
    3) Buy with a reason. When I buy something, I buy for a reason, e.g expecting a certain setup to play out, if it doesn’t pan out I dump, immediately.
    3) Take profits. I sell half position at set profit intervals–depending on the setup.

  34. Brian says:

    Get a stock you believe in and stick to it, up or down.

    Buffet buys what he understands. I understand my stock.

  35. TCVAN says:

    Number 1 is “somewhat” correct. All the others are totally wrong…..if you want to make serious money, that is.

  36. Gary J says:

    If you want to buy a stock at a cetain price limit sell some puts on it to collect the premium until it hits your price limit and if it never hits it you still made money on the puts. I average $1500 a month or more doing this. Its like having a part time job that only takes a few extra minutes of your time. Don’t say I never gave you anything.

  37. Tom Reilly says:

    Dollar cost averaging from bond index funds to stock index funds. Add: the passage of time, very occasional tweaking. Watch your fortunes rise!!–Tom Reilly

  38. Gary J says:

    The same thing works with the selling side of the equation. You just use calls on that side of it.

  39. money says:

    These rules are over simplified and unhelpful. Especially the rule requiring at least 30 different stocks. You would spend most of your time dealing with so many positions and not focusing on important things. You can have decent diversification with 20 stocks. Statistically there is only a very, very small benefit to having 30 over 20. So it is a waste of time to have that many. You can even get away with 12 stocks but that is about as low as you would want to go.

  40. Becca says:

    I thought Rule 1 was “Don’t invest”… Especially on today’s market!

  41. TommyGunnn says:

    In general, I think stock holders are leeches, sucking the blood(profit) out of a company without contributing. But then, the CEO and vice presidents drink the blood out of the company in mega size, so sucking is not bad. The worse ones are the stock trading companies, encouraging you to trade stock so they can make beaucoup money from you, even when you lose money. Free money is not easy. Takes hard work, patients and skills and some lucks and knowing that you may loose. Good luck !!

  42. drunkentrader says:

    Rule #1 Recognize that you are a terrible speculator and will always be behind the information curve – so forget being a day-trading stock jockey.

    Rule #2 If you want to manage your own self directed trading account, please learn how to trade first(all facets, including derivitives/options) – Trading/learning is fundamental – Speculation is an art and cannot be taught.

    Rule #3 Plan, strategize, and be disciplined in your actions/risk managment/hedging/nuetral positioning, etc. You will only be able to do this effectively if you master rule#2

    Rule #4 Keep practicing rule#2 until you can learn how to master “defined risk trades”; compare and contrast all opportunities and chose the best trade/purchase/cover that suits your tempermant for risk and timeline for potential reward while also stimulating your entrepreneurial spirits(balancing the dull trades[the divident stocks] with trades/companies that excite you) – otherwise, why “play” in a market unless it intrigues you.

    Rule #5 If you dont have an entrepreneurial eye/instinct for markets/opportunities and cant comprehend the basic arithmetic to “construct trades” You WILL fail at being a successful speculator, investor and trader, and therefore should discuss a plan for your future with a registered investment advisor.

    Rule #6 Never trade drunk and never take investment advice from those that do. However, drunkentrader is quite confident that RULE #2 is THE GOLDEN RULE.

  43. Ty says:

    Well.. I disagree. On a large scale but with reasoning.

    Rule #1: Dont lose money.-(Warren Buffet)
    Rule #2: Dont for get rule #1
    Rule #3: Always avg up.
    Rule #4: If a stock goes in the right direction add to your position and follow it. But USE A STOP LOSS!!! PLEASE.
    Rule #5: Selling at a profit is the only way to make money. So, the main key is cut your losses short and let your gains run (with limited control).

    Long term is not always teh key. The more you hear about long term, the more likely the contrary move in the market is to come.

  44. Schnurri says:

    Run as fast as you can from the stock market. I place ads in the papers and buy gold, silver, guns, and various antiques/collectables and make from 50% to 1,000% per trade. Can Wall Street beat that?

  45. MESIMPSON says:

    I’m not buying into the pumps or the dumps. I’m waiting for the next crash to get in.

  46. Larry says:

    A share tip is called insider info. You’re only allowed to lose money. As for holding your money long term in one place; that is for people whom are scared to enter on the swing up; which is hardly savvy. I’d say holding is the dumbest idea; though I see the point. If you are a long term investor; what is the point of reading the latest analysis. Just saying. Beware of people selling advice. Best tip of the tips.

  47. NoOneOfConsequence says:

    Putting all your money into one stock is idiotic.
    Putting all your money into gold is idiotic.
    Putting all your money into one sector of the economy is idiotic.

    The Road to Riches:
    1. Produce more than you consume, invest the difference.
    2. Be diversified and liquid when you invest.Buy large cap stocks, with a high number of daily trades. Buy precious metals in small denominations.
    3. The taxman is a partner in your business – be aware of what your partner expects back from every investment.
    4. Closely consider divident paying stocks. If you end up stuck with a stock for a while, at least you get a check every month.
    5. MOST IMPORTANT: There’s only one person who cares about your money…YOU. PAY ATTENTION.

  48. Gilbert says:

    Instead of picking 30 stocks, why not getting a FTSE or S&P (or any other market indices you fancy)ETF? That way you don’t need to pay brokers like ADVFN. If you ask a car showroom salesperson which means of transport is good for you, he/she will never tell you to go for the public transport or cycling.

  49. Darwan says:

    Sounds like too much work, too much time wasted by yourself all alone when I can just apply my profession and be done with it.

    I’m a plumber and unless you live under a rock somewhere, you can not escape me.

    “All that glitters is no gold”

    Art Carny

  50. stephen says:

    Buy low and sell high…..you will never lose a dime.

  51. Rich Mann says:

    Some great advice in the artical and comments along with some duff advice.

    Remember you put your own money where your mouth is, and your pick you own risk levels,
    having a varied portfolio helps your risk, but dose not eliminate it.
    Some you win some you loose, but the game is to win more.
    a profit/loss is only a profit/loss when you sell.
    Do your own homework to be in at the start, i missed out on Apples Growth, i also missed the fall

  52. Chiffa the Swinger says:

    What a load of Carp
    Play the swings, long term means locked into a loss
    Dont buy 30 shares unless you have at least 100k
    Invest with momentum in mind
    Dont buy stocks out of balance to the proportion invested
    £1000 in a stock that swings 5 – 10% is worthless
    £5000 in a stock that dumps 50% and wide spreads of 30% is dangerous
    Learn to watch the sector changes
    Swing both ways north and south

  53. K A PRASANNA says:

    GOLDEN RULES IN STOCK MARKET INVESTING

    1. Not all can make money in stock market. Some will make, most will lose.

    2. Stock market requires continuous supply of naive investors, otherwise it will collapse.

    3. Share prices of most companies, in one way or the other, are manipulated.

    4. In most cases, value is created only for Promoters and their group and not for minority investors.

    5. It is always the retail investors who are hard hit since neither they have staying power nor privy to any privileged information. By the time they buy the ticket, the train would have already left the station.

    6. Rating warnings are provided, in most cases, after the disaster has taken place, leaving no opportunity for investors to safe guard their investments.

    7. Stock brokers are always bullish on market, for obvious reasons.

    8. Stock recommendations, research reports some time are given with malafide intentions.

    9. GREED is THE underlying factor for irrational IPO pricing. Still most brokers recommend all IPOs for investment.

    10. Whether the investors make money or not, the promoters and all market intermediaries make money. That includes Stock Exchanges, Brokers community, Registrars, Custodians, Rating agencies, Regulators and the Media – both print and electronic.

  54. mehboob ellahi pakistan says:

    invest in stock who is earning machine

  55. Roger says:

    30 stocks is way to many. Might as well just buy some stock mutual funds instead of managing an account with 30 stocks! Way way way to many. Also, someone mentions buying more of a stock as it is going down and selling off as the stock is going up. Good grief! It’s usually a terrible idea to average down. Buy stocks that are going up! Not down!

  56. Plunger says:

    Check out stocks with a confirmed cyclic trading range over the last 12-36 months. Choose a stock which cycles at least 4 – 10 times during the observed period.
    Watch for low chart signals. Buy on lows and sell on increasing share price.
    Golden Rule#1 Set stop loss at a 2-5% of Share price to minimise losses if all turns pear shape! Review stop loss point and increase stop loss in line with the increase in share price.
    Golden Rule#2 Don’t get too greedy. Sell at 10% – 15% improvement on share price.
    If you so wish wait until the same stock falls again close to the bottom of its trading range and buy in again. Look for turning points.
    I cannot understand the logic of keeping a stock over the long term if there is an opportunity to lock in profits on a more regular basis.
    Finally limit your supply of shareholdings. 30, or even 20, is too large a number to be in full control of. My limit is 10 which I am most certainly a happy chappie with.

  57. Max says:

    30 shares, LOL, who wrote this? an idiot? No one ever got rich juggling 30 shares.

  58. Pete says:

    The whole thing about “investing” is the source of all our woes. Investing should reflect confidence in a company and it’s products or services. You share the risk with them and, maybe, get dividend. The minimum term to let your money ride should be 1 year. Not selling whenever you get scared. In that way the company can really do something with the money. People should relearn that in order to earn money you should be productive for society. You can always gamble with lotteries and casinos with instant gratification. Or lose your shirt.

  59. Michael Haymar says:

    I agree with the first four rules but not the fifth. The only investments you should make for the long term and land and gold. He also missed two important rules. Rule 6 – You make your profit when you buy. Rule 7 – It is better to be one year too early, than a day too late.

  60. Duane says:

    Stocks and shares are not a very good investment strategy. With stocks and shares you never have anything physical, silver and gold investment is a much better investment strategy. Silver and gold have always been a great investment, they have been seen as wealth symbol for thousands of years.
    Stocks and shares have only been around for how many years???

    You can start silver and gold investing for a very small amount of money. A silver coin can cost as little as £24, buy little and often and you will be in a much better situation then investing on something on your computer screen.

    If you are looking for a wealth system, check out this youtube video I created. http://youtu.be/8_9t7DkfRKE

    Thank you for reading this comment

  61. Matt Bradley says:

    I approach share investment with 2 rules.

    1. My good friend A who is a retired investment banker at 40 doesn’t go anywhere near shares. I figure he probably knows something I/we don’t.

    2. It’s gambling. You all preach rules that might have worked out for you, but it’s gambling. You just got lucky – doesn’t make you right.

    Needless to say, I don’t bother.

  62. Davey says:

    My late father dabbled in shares and he invested in the British motorcycle industry which went bankrupt. Before WW2 there was really no competition but IMHO the thing that killed the British motorcycle industry was the learner law that was introduced in the 1960s if I remember correctly. This law restricted learners to an engine capacity of 250cc. Honda saw the opportunity and produced the Honda CB250, a bike that was capable of reaching “the ton” (100 miles per hour) and the rest is history. Admittedly the Ariel Arrow was also capable of 100 mph if it had a decent bullet shaped fairing but the Honda was a nicer bike. My father lost his money. Take care!

  63. Snart Gadsby says:

    Sorry its crap advice if going in to make money.By all means put your thirty share selection onto a watch list portfolio and I’ll bet 25 out of 30 loose money;watch them learn them follow them breath them,predict price movement to yourself see how many times you would have lost if attempting to trade.

    ABOVE AND BEYOND ALL ELSE RUTHLESSLY USE STOP LOSSES;STAY RUTHLESS(sic) AND DONT get engaged to THE STOCK.

    DO NOT CHASE MONEY BY AVERAGING DOWN.The use of a stop loss will enable you to reinvest once the share has bottomed out with far more shares for less money.the CVs of the directors and their backgrounds believe it or not some are difficult to track and if that is the case don’t invest.Leave all other junior markets alone use AIM .

    Never invest in a company that has bad fundamentals or the sp is so unrealistic and depends on news.

    CHECK out

    No 1 the company has got past fund raising exercised that cause dilution to the share price

    NO 2 Make sure it has cash in the bank

    NO 3 Make sure its in production,or at the very least starting to produce.

    NO 4 make sure there is a successful ready market for the product.

    NO 5 make sure it’s not a one shot one product company.

    NO 6 don’t expect a newly found source of gold to be up and producing within minutes the average time it takes to get a goldfield in production is 9 or 10 years.
    The average time an oil field similar

    NO 7 Make sure the BOD will respond to emails and phone calls and maybe talk with them.If the FD won’t talk don’t invest.

    Waiting for one or two news release a year does nothing for the stock share price so plenty of news release at least 6 a year.

    Listen and read all information then think through what it means.

    I expect to make in excess of one million pounds this year within two years may be 5,5 million

    So far this year as of now I am around £600,000 plus after basic expenses.

    There is an article in weekend electronic mail about Victoria OIl and Gas which sounds a good bet ,but the muppet who wrote that failed to advise that it may loose half its production/ops licence to due to a dispute with it one time partner .You invest in that one now watch your money loose half its value instantly better wait till the matter is settled.

    So once again read, check, study, format your own rules then dive in and good luck.

  64. J. Johnson says:

    Why do they show a picture of a large motor yacht? That is the worst
    investment you can possibly make.
    J.J.

  65. Baldev Narang says:

    There is only one rule here that says “there are no rules”. Those who consistently make money in stocks understand this rule well. If one wishes to outperform the market than one needs to keep inventing and abandoning own rules on regular basis.

  66. Andrew S says:

    Rule 4 is utter jiberish!

  67. ro alagna says:

    Investing?
    Investing is probably the mistakingly used word in the world of money.
    The definition that most accurately describes Investing is: Investing is the act of purchasing an asset.
    Having said that, for the unsophisticated investor, Investing can also be the purchase of a liability believed to be an asset.
    The definition that most accurately describes an Asset is: An asset is something that creates more income than it does expenses.
    Buying stocks of a company is not really investing, it is speculating.
    Speculating that the purchase of a stock will do better by going up above the purchase price in some undefined future in a market that is deliberately fixed by the government and the biggest Wall Street players.
    Stocks produce income 2 ways for the stock purchaser:
    1. By selling purchased stocks at a higher price than the purchase, minus the taxes and fees.
    2. Holding stocks the payout a dividend that pays more than taxes and fees.
    The people like Warren Buffet don’t buy stocks like most people, they buy stock positions that are large enough to wholly own or control companies (Geiko, Sees Candy, etc.).
    They purchase ownership or control through stock purchases.
    The ownership and/or control of successful companies creates tremendous amounts of income, that are accompanied by the risk involved.
    The buy and hold approach for most stock purchasers is, over the long term, very high risk and low return.
    The big crash we are living through that started in real estate also crashed the stock market as well.
    I took a long term approach to purchase and hold a $10k position in Kimco Reit dividend stocks in 2004, watched those stocks split upward with values double in ($20k) 2 years.
    In less than 3 years, through massive government-corporation created fraud, in June of 2006, it all came crashing down with real estate, stock market and real estate, together.
    When I finally decided that nothing was coming back for another 20 years or more, I sold Kimco, the number 1 REIT in country, for $4,000 loss.
    Investing?
    I bought an asset that turned into a liability…

  68. david thompson says:

    comments advice is too easy-
    but truly delivering & not bending rules where they are broken &
    then suffer!
    Global Macro Markets are deception psychology & manipulation . where few truly appreciate until it is too late ! tough rough game !expect one’s ummy to turn inside out whether winning or losing

  69. trolling here there and everywhere; also the game says:

    MATH fail. The difference in the standard deviation for 20 and 30 stocks is 0.81%. Just buy 20 stocks; fees will eat up your portfolio.

  70. km says:

    There is actually only 1 Golden Rule:
    1. Invest in Companies you Trust that Payout! Those that Pay Dividends or Buy Back Stock. Stock Buy Backs should Increase the Share Price.

    This 1 Golden Rule is hard to achieve since the Market is Full of Conmen. Qualified, Experienced Mortgage and Pension Endowment Managers have failed trying to make Money. There are Managers Claiming to Make Profits but only Time Will Tell if they Deliver what they Promised or Did in the Past once they have your Money!

    Good Luck!

  71. v kumar says:

    Very good write up,comments and advise.Basics are exemplary however most of the advise is not practical in present scenario of great economies in doldrums and common man struggling to survive somehow.When this hope less gloom will end is not yet known.Financial institutions specially Banks private as well as Government owned,need to give up greed and deceit to mislead and loot public at large.All financial institutions must dedicate themselves to good old True Banking.Pull up world economy from the bottomless pit in to which it has fallen.

  72. Артем Владимирович says:

    Good afternoon ladies and Gentlemen!

    Accidentally came here via a link from Bloomberg Businesseweek

    Attention! Appeal only to large-scale investors! Small speculators have nothing for the soul, this please comment below do not read! Engage in speculation! And burn burning down! I ask not to disturb!

    I don’t know the rules of this site, for this reason, your contact information, or other data here do not place ! Gentlemen prefer more detailed tutorials, check with the administrators of this site my email address You can write to me!
    Authorize the administration of the site, Gentlemen seriously interested in below information to make my Inbox ( as you can on a paid basis ) “at the discretion of the administration.”
    Attention! I communicate strictly in Russian! To do this, gentlemen, You need a good translator with the knowledge of the Russian technical language! ( No more other languages, I don’t mind the dialogue! )

    Reading the comments, once again, convinced that almost all of the opponents do not wish to work, and from this place that all Your troubles!

    None of the comments I saw talented by nature people who look into the future!

    What truly sorry!

    Your links on the merits of ancient methods of success and received profit of famous personalities, sadly outdated! Hopelessly outdated and themselves methods methods described personality!

    Ladies and gentlemen! Want to deal globally on a large scale? Have the means? Write!

    It is the global production project! Organization of an enterprise on the territory of Japan ( Tokyo )

    Area: high-tech products to the markets of developed countries!

    share capital consolidated profit when the designed capacity is equal to 1 000 000 000 $

    I repeat attention Lord! Only for large investors!

  73. MR RICH QUEST: max says:

    PLS POST/APPREHAND
    gelll padilla yang kampo enlsted soldier
    nagdrive ngayon”
    NOW”
    pagtatanggol laban terorista
    hindi para sa kasamahang nais biktimahin
    at mas lalong hindi dapt ipagamit para sa
    personal interes ng manlulupig/sadistang “AMO” at
    lalong hindi upang HUWAD NA SAKSI*
    que horor!!!!!!!!!!!!!!!!!!!

  74. Pratical Investor says:

    For the novice, I suggest concentrating on just one or two shares until you get to know them like your pets – every slight twitch you can figure out why!
    For the medium investor, repeat the novice rule on a few more shares – one can not make real money unless one knows the share (ie company inside out over at least a period of twelve to eighteen months)! and even then, most popular shares are now under the influence of spread betting to catch punters out!!!
    For the super rich, thirty shares portfolio is ideal !

  75. Vern says:

    You say that interest from banks is taxed, no, like any investment any isa be it stocks or banks is tax free.

  76. Virginia davis says:

    Im unable to find your card Cardsapp

  77. Canajian eh says:

    “..If you can see stock market investing as a part time job from now until retirement…”

    Worked for me. Re-invest your dividends, buy on pull backs, but best of all: SELL WHEN THEY YELL, BUY WHEN THEY CRY! Especially the buy.

    Up 183% since 2008.

  78. p v shenoi says:

    Promises to be good advice. Thanks

    Best regards from P V Shenoi

  79. p v shenoi says:

    good advice !!! Thanks

  80. Humberto Villalva says:

    He who has the gold, makes the rules !!

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