The most important things an investor should remember
Investing in a vacuum is never a good idea.
Professional money managers are influenced by their performance and lack the luxury of holding on when a security starts to tank, so investors should focus on the long-term.
Asset allocation is the most important factor in portfolio performance, as it determines 91% of total portfolio performance. A sound selection of asset classes is essential for long-term success.
Investing in any type of investment is risky, from CD's to bonds, which can contain as much risk as stocks.
Taking more risk does not always mean a higher return, as it can lead to losses in a portfolio. It is important to consider the return of the money more than the return on the money.
The most important idea is that news only sells when it gets our attention, which is not always good news for investors.
Even great companies can falter, and too much exposure to too many of them can have a negative effect on a portfolio. Too much exposure to these giants can have a negative effect.