Unshakeable

Become obsessed with the four core principles of investing

Instructions

Avoid losing your money.
Instead of asking, “How can I make the biggest return?” ask yourself, “How can I avoid losing money in this investment?” Focus on protecting the downside just in case the markets surprise you. Diversify your portfolio in a way that minimizes your risk and maximizes your rewards.
Hunt for investments where the rewards vastly outweigh the risks.
For example, you can invest in undervalued assets when the markets are down and pessimistic. Snap up stocks of blue-chip companies while they are cheap and wait for them to regain their value. These stocks can also pay out dividends even as you wait for the prices to recover.
Become tax-efficient by reducing your tax burden.
Before investing, ask yourself, “How tax efficient is this asset, and how can I make it more tax efficient?” If someone proposes a financial opportunity with incredible returns, ask them, “Is that gross return or net return?” If it’s a gross return, then the returns are false because they haven’t deducted the taxes yet. Only focus on the net returns as they are a true indicator of the value of the investment. Also, only work with a registered investment advisor that has tax experts on their team.
Diversify your portfolio.
Spread your investments out into different asset classes such as stocks, bonds, real estate, etc. If you’re investing in stocks, buy a range of company stocks instead of only one company. If investing in real estate, but properties in different locations around the country instead of within one region. Invest in markets in foreign countries instead of putting all your money in your own country. You can also use dollar-cost averaging (investing a fixed dollar amount regularly) to invest over months and years instead of timing the market.