Some tried and true principles for the journey toward wealth

The Ticker

January 28, 1998|By Julius Westheimer

HERE are some investment principles that apply to both up and down markets:

Listen to experienced professionals, stick to quality, invest for the long pull.

Your emotions are your best "reverse indicators." If you want to sell, it's probably time to buy, and vice versa.

Don't let every headline or news bulletin kick around your portfolio. Good companies will be around a long time.

You make more mistakes by selling than by buying. If you buy a "dog," the most you can lose is your investment. But if stocks you sell double and triple, then split, you suffer financially and emotionally.

Don't take "hot tips." Nine out of 10 go sour. The "tipster" forgets he or she gave you the tip, and no one warns you when to sell.

You need not live on a fixed income. Buy stocks that raise their dividends regularly -- AT&T, Procter & Gamble, Exxon, Bristol Myers Squibb, etc.

If the market worries you, sell half your big holdings. Then you're OK no matter what happens.

Don't let taxes dictate investment judgment. If you pay capital gains taxes, you've made a profit. Worry about losses, not gains.

Buy mutual funds with a strong five- to 10-year record. One- or two-year performance can be misleading.

Never have over 30 percent of your holdings in one stock, no matter how great it's doing.

Here's why "market timing" is a loser's game: 50 percent of the stock gains in the last 10 years occurred in only 10 of those 120 months. And you're going to pick those months?

There are no emergencies. Don't let anyone rush you. Nothing will run away.

Pub Date: 1/28/98

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