Too often investors view the stock market like a roulette wheel or a toss of the dice. If I roll it all at the right time, I am a winner. If not, the big “L” ends up over my eyebrow and on my tax return.

Even those who abhor gambling slip into the casino on Wall Street. Although having no understanding of how the stock and bond markets work, they plod ahead with greed and fear engraved on their brokerage statement. Inevitably, the markets with uncanny perception take these investors for a ride down “Loss Lane”. There are obvious ways to avoid this frustration.

Gambling abdicates order for chance with a dependent hope upon luck. Some gambling, like a poker game, requires skill that leverages fortune. However, such schemes of chance and fortune can only bring you winnings occasionally. When this happens, “winners” acclaim their gains, but must be knuckled to talk about their losses. Essentially, your goal should include limiting your losses with consistent gains.

Every decision becomes sensible when order gets acknowledgement with an equal and greater aversion to reckless impulse. This requires having a system, a method, a discipline. Any set of rules or principles that have been tested by others will make the ups and downs of investing prudent. Using a consistent method, tested by demonstrated results, limits the impulse for greed while assuaging the pulse of fear.

A number of investment authors have developed prudent investment methods. This list may be of some help.

“Every prudent person acts out of knowledge, but fools expose their folly.”
Proverbs 13:16

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