My Sunday Washington Post Business Section column is out. This morning, we look at Ritholtz’s rules of investing (part II).

Here’s an excerpt from the column:

“This week, we’re going to pick up with my rules for investing. These rules come from 20 years of experience – or 20 years of learning from my own mistakes. My list is designed to help you understand what you face as an investor and avoid the sorts of errors that cost many investors a lot of money. Understanding the philosophy here will result in fewer losses, better performance and more restful nights.

Because I didn’t want to overwhelm you, I broke the list into two parts. Before we get to this week’s list, you can read the first part here. Those six rules were:

1. Cut your losers short, and let your winners run.
2. Avoid predictions and forecasts
3. Understand crowd behavior.
4. Think like a contrarian.
5. Asset allocation is crucial.
6. Decide if you are an active or passive investor.

Let’s move on to part two . . .>

For some reason, my WaPo print edition access is not working (if anyone can send that PDF, I’d appreciate it)



Ritholtz’s rules of investing (part II)
Barry Ritholtz
Washington Post, October 14 2012

Category: Asset Allocation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Ritholtz’s Rules of Investing (part II)”

  1. [...] post: Ritholtz's Rules of Investing (part II) | The Big Picture Comments [...]

  2. super_trooper says:

    7. Maximize profits and minimize losses.
    8. Use common sense.
    9. Yep, some ppl are full of sh!t.
    10. Distinguish reality from fantasy.

  3. S Brennan says:


    I read you blog daily…okay, several times a day, because while I have disagreed with you on subjects [minivans come to mind], I feel you are fair broker of information.

    That said, I sure wish I could focus on my life’s work while putting money away for a rainy day [I've already had many as I have noted in previous comments] with out having to worry about whether I am lending money to some immoral scam artist, being taken to the cleaners by immoral scam artist…and getting a reasonable return…understanding that as times change, so too do returns.

    I will do far more for humanity if I could focus on my work, but Wall Street makes such a course impossible for 10′s of millions of Americans, how can this be good for the overall economy?


    S Brennan

  4. RW says:

    In further support of a focus on market and individual psychology (just to add some academic juice)

    A major empirical win for Campbell and Shiller.

    “This is why only fools say today that movements in market-wide price-earnings ratios are best interpreted as shifts in rational expectations of future earnings and dividend growth. Instead, they are best interpreted as do (sic) to fads and fashions in how much people are willing to nerve themselves to pay for a dollar of earnings today …”