By Tony Levene

Although it’s important to make the best of your finances, it’s even more important to avoid losing what you already have. If your investment money disappears, you may never get a chance to earn it back again. So follow these ten golden rules on what not to do for financial happiness!

  1. Never listen to a person you meet in a pub.

    Or anywhere else. They might simply be hoping to influence you so they can unload difficult to sell shares. More likely, they probably don’t know what they are talking about. And, if they do, you could be an unwilling participant in insider trading and end up with a criminal charge.

  2. Never press ‘go’ on a share purchase without thinking about it for at least 30 minutes.

    If you buy clothing and most other items online, you have legal rights including the right to send your goods back if they don’t work for you. This ‘cooling off’ period also applies to purchasing insurance. But you can’t change your mind about a stock market purchase if you decide it’s wrong for you, without potentially losing a lot of money.

  3. Never expect the past to replicate itself in the future.

    It may often happen but it is far from sure. If life was that easy, then financial markets would never surprise us and no one would make or lose money.

  4. Never read an investment article without checking the credits first.

    Whether online or in print, you need to know something about the writer and what their angle may be. If a journalist goes to China ‘courtesy of ABC Fund Managers’ then the article is likely to reflect well on ABC Fund Managers. If a ‘blogger’ writes about XYZ, you need to know if the blogger already has shares in that company or is planning to buy some. Or the blogger could be a fund manager who is pushing the firm’s funds. If any of these apply, then the article does not contain unbiased information.

  5. Never invest more than you can afford to lose.

    If you or your family will end up in discomfort should your investment go wrong, then don’t do it. It’s that simple.

  6. Never be swayed by media headlines.

    The media is a 24 hour a day operation which needs a constant diet of novelty. It can be a ‘currencies crash’ and a ‘shares shambles’ one day, only to be a ‘bonds bonanza’ and ‘equities euphoria’ the next. It’s all short term noise which is in the past by the time you hear about it. Ignore it.

  7. Never confuse new with suitable.

    New may be good at your local electronics store, but there’s no merit in ‘new funds’. Financial advisers often push these, claiming they represent up to the minute thinking. You need something with staying potential, which could be a fund that’s been around for decades, so don’t get suckered into buying the latest gimmick or flavour of the month simply because it’s new.

  8. Never forget why you are investing.

    It’s for you and your family’s future, perhaps for your retirement or university costs. Think long term. If you want to show how clever you are minute by minute, stick to computer games or visit a casino or racetrack.

  9. Never listen to anyone who phones you.

    Legitimate advisers do not make cold calls. Dishonest scam merchants do – literally all the time. That’s all you need to know.

  10. Never attempt to guess winners.

    There’s only one best share or best fund. They’re completely unpredictable and they change all the time. Consistently keeping just a little ahead of the averages is the best you can hope for and that’s an investment job well done.