Charles Ellis has taught investment courses at the Harvard Business School and the Yale School of Management. He is an award-winning author on the subject of investing, his most popular book ‘Winning the Loser’s Game’ features excellent discussions on a number of issues including investing in retirement, coping with risk and building a successful investment portfolio.
One of the most interesting items in the book is what Ellis calls “The ten investment Commandments”:
- Save. For your future happiness, and education for your kids.
- Don’t Speculate. If you must gamble, limit the amounts you play with to the same amounts you would stake at Las Vegas.
- Don’t do anything by investing primarily for tax reasons. Tax shelters are poor investments. Tax loss selling is primarily a way for brokers to increase their commissions. There are exceptions, of course, and some are important.
- Be sure you have an astute estate plan that is current with your financial situation and the ever-changing tax laws.Don’t think of your home as an investment. Think of it as a place to live with your family.
- Never do commodities. It’s only ever price speculation, not investment in economic productivity or value creation.
- Don’t be confused about fund managers. They are usually very nice people, but their job is not to make money for you. Their job is to make money from you.
- Don’t invest in new or “interesting” investments.
- Don’t invest in bonds just because you’ve heard they’re safe.
- Write out your long-term investing goals and stick with them.
- Distrust your feelings. When you feel euphoric, you are probably cruising for a financial bruising.
These are directives that are embedded in our business and are an integral part of our advice to you. As you know already know, our message never changes.