By
Timothy Lutts, Chief Investment Strategist
After working in this business for more than 22 years, Timothy says, "There are 10 things I know. The first five are directly about investing, the second five, indirectly."
- The business of investing can provide great rewards to those who work at it and are willing to learn. Those who refuse to learn will lose money.
- To succeed as an investor in growth stocks, it’s best to buy when upside potential dwarfs downside potential, to cut losses short, and to let winners run.
- To succeed as an investor in value stocks, it’s best to buy low and hold patiently, until the stock is fully valued.
- Your greatest enemies are your own emotions and the blow-dried fellow who reads the evening news with a heartfelt–but undeserved–sense of urgency. Try to ignore them both.
- For over two centuries, the long trend of the markets has been up, reflecting the growth of asset values, and I recommend that you invest in synch with that trend. Your greatest ally is time.
- As to the world, globalization is a powerful trend that is positive for the world as a whole. Embrace it, looking forward, not backward.
- However…consider the idea that the underappreciated risks arising from the increasing inability of fossil fuels to fill growing market demands are greater than the well-publicized risks deriving from global warning. Invest accordingly.
- And…consider the idea that the longer our elected representatives in Congress sanction the increasing growth of our national debt, the greater the pain when we have to pay that debt, while providing Social Security and Medicare for an exploding population of old folks (myself included). Invest accordingly.
- In the meantime, keep on learning. Not only will it help you become a better investor, it will keep you young.
Finally, have faith in the ability of intelligent, innovative men and women to adapt, as they always have, and to solve the problems of the future in ways that are unimaginable to people of today. Invest in these people when you can.”
More Stock Investing advice:
Two Lessons from Stock Performance Champs 2/11/10
Paul Goodwin finds there's no substitute for buying well and a supportive market.
Cabot's Position on Shorting Stocks 1/27/10
Cabot Market Letter Editor Michael Cintolo explains Cabot's position on shorting stocks.
Why the Lost Decade is Good News for the Future 12/16/09
So-called “lost decades” for investors in the past have usually ushered in powerful new bull periods.
Ten Tips for Your Investing Toolkit 12/10/09
These tips will set you on the path of investing success.
Three Short Lessons for Investors Just Getting Started 12/4/09
These three short lessons will help you get started on the right track.
Three Characteristics of Winning Investors 11/26/09
Here are three particularly important traits of successful investors.
The Three Most Important Investing Lessons 11/6/09
Timothy Lutts focuses on the three most important lessons for successful investing.
Dispelling Investment Myths 10/15/09
Mike Cintolo busts five common investment myths.
A Simple Way to Assess Your Risk 10/1/09
A "position sheet" will give you a great view of your portfolio's risk and rewards.
Three Reasons to Own Individual Stocks 6/22/09
Paul Goodwin offers three reasons to invest in individual stocks over mutual funds.
Guidelines on Handling Earnings Gaps 4/22/09
Here are four guidelines to help you profit from earnings gaps.
How to Handle Earnings Season 4/19/09
Michael Cintolo offers three options for handling earnings season.
Three Clues to Determine the Market's Next Move 1/22/09
Here are a few clues to watch, so you can be one of the early ones on board the next move...whether it's up or down.
Advantages to Being an Individual Investor 1/12/09
Three ways individual investors have advantages over mutual funds.
Dispelling Six Common Investing Myths 7/3/08
Avoid some of what doesn't work in the stock market and improve your returns.
Listen to Your Stocks 4/23/08
A big earnings gap lower, especially after a stock has enjoyed a huge advance, often spells the end for a stock's up cycle.
Practice Patience Early in a New Bull Market 3/29/08
Considering the risk that you might buy at a false bottom, we don't think the risk is worth the reward.
Tips on Handling Market Stress 3/15/08
Having a system will help you manage market stress especially when the market's most volatile.
How to Invest During a Recession 1/17/08
Timothy Lutts is watching charts and finding bargains.
On Improving Your Personal Side of the Investing Equation 2/25/08
Eight ideas to help you improve your personal moneymaking habits from "New Market Wizard" by Jack Schwager.
SNaC to Keep Your Portfolio in Shape 2/11/08
SNaC stands for Story, Numbers and Chart, and it's the method Paul Goodwin uses to pick stocks for the Cabot China & Emerging Markets Report.
Be Ready to Buy when Market Leading Stocks are on Sale 2/1/08
The worse the economic chaos gets…and the lower the market goes…the better you like it.
What to do when Sellers are in Control of the Market
When the sellers remain in control, this Q&A will help you decide what to do.
Why Recession Really Doesn't Matter to Investors
Should you wait until the recession ends before you invest? No—because all stocks trade on expectations of the future.
Technical Analysis: Free Yourself from Why
The best investors generally free themselves from the question of why a stock or the market is going up or down.
Keeping Your Balance during Market Turbulence
If you're an investor, you're worried. That's what you get paid for. Here's something to keep in mind during turbulent times.
Growth or Value Investor? Depends on your Investing Temperament
Which strategies are best for you? It’s all a matter of temperament.
Are you a Growth Investor or Value Investor?
The most important thing for you to understand about investing in stocks is yourself.
Know Thyself. Match your Investing System to your Personality
What really matters is matching the system's pros and cons with your own personality.
Stock Prices: Important and Nothing
It's value and opportunity, not the price of the stock. And then there's December...
Follow Your System
Your first task is to clearly identify your system; your second, and most difficult, is to follow that system.
Fundamental or Technical Analysis: The Perils of Purity
Following either of these investing styles exclusively can be risky for your total portfolio.
Wise Words from Warren’s Wife: Don’t get too attached to the outcome
People have been trying to follow Warren Buffett’s investing advice for years but maybe his wife’s advice can also be helpful.
A Stock, Like Love, Thrives on Romance and Dies on Statistics
If the RP line falters over a period of weeks, you’ll know the romance has ended.
Markets Are Never Wrong; Opinions Are
A rewarding strategy is to identify the current trend and stay with it as long as it persists.
Run, Sheep, Run
By watching investor sentiment and adjusting your investments accordingly, your investment results are sure to improve.