Title: 10 Timeless Rules for Investors
Headings: 10 Timeless Rules for Investors
10 Timeless Rules for Investors
Key Takeaways
1. Markets Return to the Mean Over Time
2. Excess Leads to an Opposite Excess
3. Excesses Are Never Permanent
4. Market Corrections Don't Go Sideways
5. Public Buys Most at the Top and Least at the Bottom
6. Fear and Greed: Stronger Than Long-Term Resolve
7. Markets: Strong When Broad, Weak When Narrow
8. Bear Markets Have Three Stages
9. Be Mindful of Experts and Forecasts
10. Bull Markets Are More Fun Than Bear Markets
The Bottom Line
Article Sources

Content: Markets Return to the Mean Over Time
Whether they face extreme optimism or pessimism, markets eventually revert to saner, long-term valuation levels. According to this theory, returns and prices will go back to whence they came— reversion generally puts the market back to a previous state. So when it comes to individual investors, the lesson is clear: Make a plan and stick to it. Try to weigh out the importance of everything else that's going on around you and use your best judgment. Don't get thrown by the daily chatter and turmoil of the marketplace. 2. Excess Leads to an Opposite Excess
Like a swerving automobile driven by an inexperienced youth, we can expect overcorrection when markets overshoot. Remember, a correction is represented by a move of more than 10% of an asset's peak price, so an overcorrection can mean bigger movements. During a market crash, investors are presented with really great buying opportunities.