John Templeton’s Investment Rules

Here’s a good list of legendary investor John Templeton’s investment rules.  Barry Ritholtz has more details on each rule at his site (see here), but the summary is below.  It’s a nice addition to our growing list of rules and guidelines (see here).

1. Invest for maximum total real return
2. Invest — Don’t trade or speculate
3. Remain flexible and open minded about types of investment
4. Buy Low
5. When buying stocks, search for bargains among quality stocks.
6. Buy value, not market trends or the economic outlook
7. Diversify. In stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don’t Panic
11. Learn from your mistakes
12. Begin with a Prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn’t even understand all the questions
15. There’s no free lunch
16. Do not be fearful or negative too often

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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Comments

  1. “Begin with a prayer”.
    That’s probably one of those I liked the most,because it an allegory for understanding that the future is out of your control and therefore a “prayer” in the hope of godly intervention is comically appropriate.

  2. I think #14 goes with #12 prayer. It suggests that an investor needs to be bit humble, and he should not think he knows all the answers. Those rules fit well with #7, Diversify, as the reason we don’t concentrate our bets is simply because we cannot be certain of the outcome, so it is better to spread one’s bets. Arrogant know-it-alls will lose sooner or later.

  3. I like Begin with a Prayer, too.
    Prayer can be described as a moment of humility in which you acknowledge your weakness and ask for help. Even if you are not a believer, you can still approach this as a meditation exercise.
    It’s a chance to quiet your mind and reflect on your values and your objectives, which is especially valuable in today’s chaotic world with so many distractions.

  4. Nicely put.

    (I’m a long time attender of a Friends Meeting; this sounds like something a Quaker would say).

  5. Your irreverence along with an inability to use correct punctuation loses my respect — you therefore lack credence.

  6. John Templeton was not only a famous stock investor, but a philanthropist — a kind and intelligent man. Much of his unselfish success was a tribute to his deep Christian beliefs. I believe his success and clear headed beliefs were helped by his wise decision every morning to stride against the flow in his beloved Behamas — a clearing of his mind from all the chaos that he left behind in the states.