7 Rules for Investing Success

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When the news headlines seem gloomy and it feels like the global markets are in turmoil, the last thing on your mind may be trying to outperform the market. It can be difficult to focus on investment strategies and achieving long-term gains when it seems like everything is going wrong. In times of uncertainty, it's important to remember that investing is a long-term game and short-term fluctuations are inevitable.

It's easy to get caught up in the fear and panic of market downturns, but it's important to keep a level head and stick to your investment plan. While it's natural to feel uneasy during times of market volatility, it's important to remember that the market has historically always recovered from these dips. By staying disciplined and maintaining a long-term perspective, you can increase your chances of achieving your investment goals even in the midst of challenging economic conditions. 

#1 Find strong management teams

One effective way to find home-run stocks is to look for leadership that commits to long-term success.
That’s when you know that they will create superior returns for their shareholders. 

#2 Look for great business models

Superior stocks often have natural moats built around them to protect them from the competition. Look for companies that set their own rules—often by creating or revolutionizing an industry. 

#3 Look for a strong cash flow

There's no better indicator of business health than cash flow. Many companies now make an art form of disguising their true cash flow. 

#4 Stay focused on the long term

Stock investors need a time horizon of at least three to five years. Ups and downs in stock prices can be unrelated to the true strength of the business. Every great stock has suffered short-term misery. 

#5 Generate future fair valuation ranges before buying

There are lots of great companies run by great management teams, but their stocks are overpriced. Great returns come from buying great companies at good prices. 

#6 Look for growth opportunities

Target companies whose stocks you think could grow 20% or more annually for five years. One or two fast-growing companies can substantially lift your entire portfolio. 

#7 Diversify

Make sure that no single failure will keep you up at night. Balance your portfolio with a range of stocks. Vary your investments by industries, location, and size of a company.

Thing is, when times are tough, it’s not easy to follow these rules. Many investors let emotions take control and make rash decisions. And that’s the start of a portfolio disaster. 

Happy Investing!

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