As an investor, one of your New Year's resolutions may be to polish up on the investment wisdom of our elders.
The famous British investment guru Sir John Templeton has 16 Rules For Investment Success, his best tips on what investors need to keep in mind if they're going to generate positive returns.
His lessons are the end result of a lifetime of knowledge, and include advice on stock selection, going against market sentiment, keeping your cool, and putting investing in perspective.
These words of wisdom provide a solid foundation for success for new investors and an invaluable supplement to existing investors' knowledge of the market.
1. Invest for maximum total real return
Templeton advises investors to be aware of how taxes and inflation erode returns and to avoid putting too much into fixed-income securities, which often fail to retain the purchasing power of the dollars spent to obtain them.
Source: FranklinTempleton.com
2. Invest – don't trade or speculate
This tidbit echoes the words of Jack Bogle to investors: get out of the casino. Templeton warns that over-action can eat into potential profits and eventually results in steady losses.
Source: FranklinTempleton.com
3. Remain flexible and open-minded about types of investment
No one investment vehicle, whether it's bonds, stocks, or futures, works best all the time. That being said, Templeton notes that the S&P 500 has "outperformed inflation, Treasury bills, and corporate bonds in every decade except the '70s."
Source: FranklinTempleton.com
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