Saturday 16 April 2011

Golden Rule of Investing

If you don't understand, don't buy or invest.

Updated to:

If you tried and still do not understand, be careful when you decide to buy or invest.

2 comments:

la papillion said...

Hi OT,

I hate this statement.

Why? It's so fatalistic...when we are born, there are a zillion things that we do not understand. If we do not make an effort to understand it, then there will be nothing that we will buy it. Some of the most rewarding things come to us when we make an effort to appreciate and understand it.

On the other hand, if you understand something, does it mean that you can/should buy it? Understanding something at your level might not be enough in the wider scheme of things. It's like I understand how to operate a TV, but if you ask me why when I press certain buttons, something will happen, I will be stumped for an answer.

In other words, this rule doesn't say anything at all. Perhaps it should be rephrased as,

"If you tried and still do not understand, be careful when you decide to buy or invest"

OT83 said...

Hi LP,

You are right.

If you tried and still do not understand, be careful when you decide to buy or invest.

This sound more positive.

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