Today’s stock market has caused a lot of usually sensible people to shake their heads and say, “This is different. This is unprecedented. It’s never been like this! We need a new set of rules to handle it.”

Do we?

Here’s a list of ten do’s and don’ts that may seem “different” than those you’re accustomed to, but they have stood the test of time and are especially important in today’s world.

1] Don’t believe for one moment that “the herd,” collectively, knows any more than you do about the stock market.

2] Don’t think that investing is trying to guess what the herd is going to do next. They don’t even know; and there’s no “system” that can tell you! (Just look at all the trouble they’re in now because they’ve been following their own tails!)

3] Don’t ever buy a share of stock unless you know what it’s really worth.

4] Don’t depend upon the herd’s assessment of what it’s worth (a corollary).

5] Don’t ever sell stock only because its price is (going) down.*

6] Do buy stock when it’s price is (going) down (another corollary).*

7] Do buy shares of well-managed companies at the right price.* Their success will be yours as a part owner.

8] Do take comfort in the fact that even the stock of well-managed companies will go down when the herd decides to sell it, but the sellers will be the losers that make the bargains for you.

9] Do your homework and spend the very few minutes it takes to look at the only two things you need to know about a company that make it a good selection.

10] Do know that those who follow these principles consistently do better than the professionals.

*Do read my “Introduction to Successful Investing” to find out when a declining price is cause for worry, when it’s really a bargain, how to know if a company is a good investment candidate, and how much its stock is really worth.

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