In the December 21, 2007 issue of Fortune magazine,  Jason Zweig says too many investors are driven by emotions instead of rational judgment.  In his article, he offers ten strategies to prevent the heat of the moment from melting your better judgment. 

T-Take the global view; emphasize total net worth and not moves in individual holdings

H-Hope for the best; expect the worst. Being braced for downturns through diversification can keep you from panicking.

I-Investigate, then invest. Understand what’s behind your investments.

N-Never say always. No matter how sure you are that something’s a winner, don’t put more than 10% of your portfolio in it.

K-Know what you don’t know. Get help from an independent advisor.

T-The past is not a prologue to the future. What goes up must come down.

W-Weigh what they say. Consider objective performance data before investing.

I-If it sounds too good to be true, it probably is.

C-Costs are killers. Pay attention to fees and expenses.

E-Eggs go splat. Don’t keep all your eggs in one basket.

Fortune Magazine
VOL. 156, NO. 13 - December 24, 2007