25 Rules Every Stock Market Investor Should Follow

When it comes to stock market investing, discipline is of the utmost importance. It is important to keep a cool head in both up and down markets and follow the investment guidelines and principles you have set for yourself. Over the course of my investing career (LINK MY JOURNEY), I have set myself a set of rules that I must follow when deciding to make a purchase or sale. Here is the list. Enjoy! 

  1. Never chase high flying momentum stocks.
  2. Never buy a stock with a PE ratio higher than 20.
  3. Focus on the dividend aristocrats and stocks that have increased their dividends every year for at least the last ten years.
  4. Only sell when a business underlying economic model has fundamentally changed for the worse.
  5. Never react to news.
  6. Always focus on the long term.
  7. Look for stocks that are at a 52 week low.
  8. Avoid buying stocks when the stock market is close to an all time high.
  9. Accumulate your dividends and then use that money later when a great investment opportunity arrives.
  10. Avoid annuities
  11. Avoid mutual funds
  12. Avoid ETF’s.
  13. Focus on stocks that have outperformed the market over the long term.
  14. Never chase yield.

  15. Do not hold your story stocks
  16. A stock with a yield in excess of  6% generally signifies that there is something wrong with the underlying business.
  17. Focus on stocks with low Betas.
  18. Focus on stocks with good credit ratings
  19. Avoid stocks with unfavorable debt to equity ratios.
  20. Tune out the noise.
  21. Do not overly monitor your investments.
  22. Avoid frequent trading.
  23. Stay the course.
  24. Remember that dividends are the name of the game in the stock market.
  25. Remember that successful stock market investing is not a sprint, it’s a marathon.

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