Nine Ways to Powerfully Boost Your Investment Performance

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Even after the recent correction there are a lot of overpriced, overhyped stocks in the market, but you can still chart your way to success. Here are nine rules you can use to guide your way. I first listed these back in August of 1996, but they work just as well today as they did then.

Investment success hinges on a handful of time-tested principles:

As Albert Einstein pointed out, compound interest is the greatest mathematical discovery of all time. I write every issue with a compound interest table at hand.

Investment results are inversely proportional over time to trading activity.

Market timing is a bankrupt strategy whose time has never come.

Sales charges and high expenses are the toxic waste of the mutual fund industry and will kill long-term performance if not shunned.

Dividends and dividend growth are the dominant considerations for long-term conservative investors.

Past performance in the mutual fund industry has virtually no correlation to future results and often is a devastatingly contrary indicator.

Stocks will outperform bonds and cash long term and belong as a cornerstone in every investor’s portfolio.

Since the mid-1920s, the long-term total return on stocks has been about 10% (dividends and cap appreciation). Plot to target a potential 10% consistent long-term total return with as little risk as possible.

Diversify, diversify, diversify. None of us has tomorrow’s newspaper. Set yourself up to win in any investment environment.

Originally posted on Young’s World Money Forecast.