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(How To) Hold On... Its Going to Be a Bumpy Ride

When markets get as volatile as they have as of late, I always like to refer back a little sheet that I have built over the years that reminds me of some timeless investment truisms.  This list originally started as a list of 10 market rules; most attributable to legendary market technician Walter Deemer.  However, it has since grown to well over that number courtesy of Yogi Berra, Peter Lynch, Warren Buffet, and my own observations.  I offer the following "10+ Investing Rules To Remember"  for your consideration:  

  1. Markets tend to return to mean over time.
  2. Excesses in one direction will lead to excesses in the opposite direction.
  3. There are no new “eras”. – Excesses are never permanent.
  4. Exponentially rapid rising or falling markets will usually go farther than you think, but they do not correct by going sideways.
  5. The public buys the most at the top and least at the bottom.
  6. Fear and greed are stronger than long term resolve.
  7. Bull Markets are strongest when they are broad and weakest when they are narrow.
  8. Bear Markets have three stages. – sharp down, a reflexive rebound, and a drawn out downtrend
  9. When experts and forecasts agree, something else will happen.
  10. Bull Markets are more fun than Bear Markets.
  11. Though business conditions may change, corporations and securities may change and financial institutions and regulations may change, human nature remains essentially the same.
  12. Companies are not your friend.
  13. The Business News/Entertainment industry is not your friend.
  14. "The Bank" is not your friend.
  15. Never try and catch a falling knife.
  16. Don’t fight the Fed.
  17. Two steps and a stumble (refers to interest rate policy/equity market reaction)
  18. Pay attention to the yield curve.
  19. Pay attention to the ISM.
  20. More money has been lost reaching for yield than any other reason.
  21. The trend is your friend.
  22. Bulls make money. Bears make money. Pigs get slaughtered.
  23. Fundamental research works; until it really doesn't.
  24. Predicting is hard; especially about the future.
  25. Use the nature of the markets to your favour.
  26. The most dangerous words in investing are: "Its different this time"

Over the coming weeks, I will expand on these points