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Improve your investing skills.

To increase your chances of long-term financial success, you must develop a value system or code of conduct to guide your investment decisions. Doing so will help you avoid many common mistakes.

The following 16 suggestions are recommended. Select from these and add others. Write down your investment value system on an index card and keep it with you. Once developed, don't stray from it. Failure to stick with your investment value system could cost you money and delay progress towards your long-term financial goals.

* Rely on yourself. Don't delegate your financial decision making responsibility to others.

* Surround yourself with people, experts, and information to help you with your decisions. However, never forget you are ultimately responsible for achieving your financial success.

* Eliminate greed, envy and jealousy from your investment decisions. Don't try to keep up with someone you know who made it big. Let your brain, not your emotions, do your thinking.

* Be realistic. For most people there is no such thing as easy money or getting rich quick. Accept the fact you can only do the best you can and try to make the most opportunities.

* Never give up. Set a goal and use all your power to reach it. Very few people go through life without emotional scars, physical ailments, or countless setbacks. Time, experience, persistence, and hard work will help you overcome all obstacles.

* Trust your intuition and common sense. Don't be easily talked out of your decisions or into things you don't understand.

* As long as you are alive, it is never too late. No matter what stage in life you are in, you will always need money. Do not develop nor practice a retirement mentality. Evolve and grow. A person's 60s, 70s, and 80s should be active, prosperous years.

Every year in life offers financial rewards and personal growth to those who want it.

* Assume you will be laid off or given an early retirement package before age 60. Think of your investment program as a second job to help you build a nest egg.

* Don't outlive your money. One of your primary responsibilities is to secure enough wealth to take care of yourself and your family over your entire life. If all goes well you will live well into your 80s. You must develop a long-term financial plan and stick with it. If you fall short, you may be a burden to your family or become a ward of a government agency.

* Know the difference between investing and gambling--do not gamble! Buying stock in General Motors or Ford at $30 a share at the end of a recession is a very wise long-term investment that should do well over 10 years. Buying penny stocks anytime is a gamble. Don't be lured with promises of huge price gains. If you have the cash to consider putting it in penny stocks, buy your spouse a surprise gift instead or go on a vacation. The payoff will be much better.

* Practice control and discipline. You will be tempted to invest in a hot stock. Be cool and objective. You'll find some of the best investments you make are those you didn't.

* Investigate every investment decision. Don't get involved with anything you can't clearly explain or would be embarrassed to discuss with your spouse. Be cautious. Try a 30 day cooling off period before investing your money. Remember, you are in for the long term.

* Have goals, not dreams. Be very specific. You can develop action plans to help reach your goals. Dreams frustrate, not motivate.

* Look at the big picture! Keep a long-term, even a global view of things. For example, recessions last only a few years and are usually followed by several years of prosperity. Although the transition period may be painful, the next several decades should be prosperous. Learn and understand economic cycles and major trends. The overall global prospects appear to be very bright.

* Unless you are a very aggressive, knowledgeable investor, do not put all your investment eggs in one basket. Diversify. If you choose to invest aggressively, watch your eggs very closely.

* Don't be an immature investor or a crybaby. If you did your homework and put your money down for the long term (5 to 10 years or more), you will not be overly concerned with daily market fluctuations--even 10 to 20 percent declines. Don't call your stockbroker every day to complain. If setbacks cause you concern (or panic), you did not plan your needs right. You didn't do adequate research, or worse, you listened to someone else's advise. Everyone makes mistakes. Just put them behind you and get back on track as soon as possible.
COPYRIGHT 1994 National Association of Credit Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1994 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Personal Finance
Author:Ludlow, W. James
Publication:Business Credit
Date:Apr 1, 1994
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