The Ten Commandments of Investing

If you are a beginner investor, these are the ten rules you need to remember

/THREAD/
1/ After the 10 cardinal sins of investing in the thread below, let's examine the 10 commandments of investing https://twitter.com/itsKostasOnFIRE/status/1353371191487041537?s=20
2/ Commandment 1: Hedge your bets

Anyone wants to make money, but no one thinks of how not to lose their money.

Hedge your bets to protect your investments from sudden downturns and yourself from unnecessary risk.
3/ Consider a potential downside first, before thinking of a possible high return.

No wonder this is Warren Buffett's No.1 rule in investing. https://twitter.com/itsKostasOnFIRE/status/1346894592063504384?s=20
4/ Commandment 2: Check the small letter

Fees can eat up almost 2/3 of your retirement funds if you are not careful.

They may seem minuscule but they add up quickly over time. https://twitter.com/itsKostasOnFIRE/status/1348005165006258179?s=20
5/ Avoid trading frequently to pay less in fees.

Choose low-cost index funds instead of mutual funds with high fees. https://twitter.com/itsKostasOnFIRE/status/1347528028168069122?s=20
6/ Commandment 3: Don't put all your eggs in one basket

Diversify in sectors, growth types, asset classes, and locations.
7/ Put a small percentage of your funds in alternative investments (REITs, commodities, crypto).

Also, consider investing in other markets outside your country via an index fund.
8/ Commandment 4: Don't forget about taxes

As Benjamin Franklin famously said, "in this world, nothing can be said to be certain, except death and taxes".

Check for any non-taxable investing accounts available in your country.
9/ Avoid going in and out of stocks to pay less capital gains taxes.

Look into tax-friendly countries to retire after you have reached F.I.R.E., so you can enjoy the most out of your retirement funds.
10/ Commandment 5: Don't go all in

Never invest all your money in one lump sum.

That way you minimize the risk of putting all your money just before the market takes a downturn.
11/ Try to spread your investments across time, a strategy known as Dollar-Cost Averaging. https://twitter.com/itsKostasOnFIRE/status/1346544591877664768?s=20
12/ Commandment 6: Be patient

Time is your ally.

Let time and compounding interest work in your behalf.

Don't try to time the market, because it rarely works out. https://twitter.com/itsKostasOnFIRE/status/1346488602562322434?s=20
13/ Commandment 7: Mute the noise

Stop listening to every "expert" and "guru" that either predicts huge increases or a market collapse.

They rarely know what they are talking about. https://twitter.com/itsKostasOnFIRE/status/1356258067684458496?s=20
14/ Commandment 8: Don't try to beat the market

Every investor thinks they are masters at picking stocks and expect to beat the market.

History shows only a small percentage beats the market consistently over the years.

Invest in index funds instead. https://twitter.com/itsKostasOnFIRE/status/1356869302494838785?s=20
15/ Commandment 9: Avoid easy and quick gains

Every time someones promises you easy and quick high returns, run away.

99.999% of the time it's either a Ponzi scheme or a scam. https://twitter.com/itsKostasOnFIRE/status/1350484335883911170?s=20
16/ If you think you are smart and you won't get into one, think again.

Even one of the most brilliant and intelligent scientists lost all his fortune, trying to get rich quick. https://twitter.com/itsKostasOnFIRE/status/1348300629064749062?s=20
17/ Commandment 10: Never invest what you cannot lose

Invest money that you can afford to lose or you won't need in the near future.

First, make a budget and create an emergency fund, before investing. https://twitter.com/itsKostasOnFIRE/status/1346866006220824578?s=20
18/ If you are a beginner investor make sure you follow the 10 commandments of investing.

And also avoid the 10 cardinal sins.

Success is only a matter of time.

/END/
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