To build wealth, shun ripoffs, avoid sin, and have courage

The Ticker

October 03, 1997|By Julius Westheimer

HERE'S SOME investment advice that is good for all seasons:

"Getting rich is not about picking hot stocks or guessing the economy. It is about how well you manage your money. You don't spend relative performance. Nor can you get rich from it." (Laszlo Birinyi in Forbes, Oct. 13.)

"Don't sweat those market swings. Volatility is above average-- but by no means at unprecedented levels." (Business Week, Oct. 6.)

"Deadly Sins of Mutual Fund Managers: (1) Chasing performance. Although 'hot' stocks are tempting, they're often too tempting. (2) Chasing yield. The yield-chasing fund manager sacrifices return of principal and regular income, hoping you won't notice. (3) Getting cold feet. Fund managers who hold lots of cash throw money away -- investors' money." (Bloomberg Personal, October.)

"Four Ways Not to Get Ripped Off: (1) Never put money into any scheme you don't fully understand. (2) If someone pressures you too much, he or she is not your friend. (3) Good investments generally don't have long stories; 10 minutes are scary. (4) There's no such thing as high returns without high risk." (Fortune, Oct.13.)

"We've had nine recessions since World War II, yet corporate profits climbed 9 percent a year. At 9 percent compounded, profits double every eight years. They quadruple every 16 years. And rise eightfold every 25 years. That's what the stock market did since 1946." ("The Stock Shop," by Peter Lynch.)

"Like an aging fighter past his prime, the market is losing energy and may be on the ropes." (Investment Quality Trends, Barron's, Sept. 29.)

"Investor's biggest challenge: Having courage to pull back a bit when stocks surge and confidently jump back in when there's gloom and doom everywhere. It's the application of discipline and emotional detachment." (Research, August.)

Pub Date: 10/03/97

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