11 Critical Lessons from the Book "The Intelligent Investor"


1. Buy At Market Lows

The best time to buy stocks is when the prices are low.

Markets declined by 20% in March 2020.

Instead of:

- Selling

- Going to cash

You should:

- Buy

By the end of 2020, the markets rose by about 68%.

Control your emotions before they control you.


2. Understand your Investor Type

2 Investor Types:

- Active  

- Defensive

Active investors evaluate their stock performance and place trades (often daily) to optimize their portfolios.

Defensive investors detach themselves from market volatility and look to the long-term.


3. Don't Pay too much Attention to the Market

The market is:

- Volatile

- Irrational

- Unpredictable

You'll preserve your sanity if you stop checking the market every hour. 

Focus on the long-term instead of the daily market fluctuations.


4. Don't Blindly Invest in Sexy Stocks

Experts may say to buy the "hottest" stocks for "astronomical" profits.

Don't. 

Do your homework to:

- Remove emotions

- Understand the financials

- Focus on the long-term potential

Always do your research.


5. Mitigate your Risk

Always invest with some margin of safety.

That could mean:

- Invest at a discount

- Invest when stocks are low

- Invest using a dollar cost averaging strategy

Instead of investing in large numbers, invest in smaller, consistent numbers.


6. Learn from your Mistakes

No investor is perfect. 

Learn from your investing mistakes and grow smarter. 

Each mistake is a:

- Lesson

- Chance for growth

- Chance for experience 

As long as you learn, you win.


7. Mr. Market is your Ally

Mr. Market is an irrational chap with good days and with bad days.

Make Mr. Market your friend:

- Sell when he is on a high

- Buy when he is depressed

Investing is gambling, it's finding a strategic way to make money over the long term.


8. The Long Term Counts

No one has a crystal ball. 

We don't know what the markets will do in the short term. 

Winning with the long-term:

- Buy what you know

- Hold on for the long term 

- Buy stable, in-demand stocks

Chances are, the long run will likely bring results.


9. Understand Dollar Cost Averaging (DCA)

Dollar Cost Averaging (DCA) is when you invest:

- Consistently

- Automatically

- Over the long-term

Don't allow market volatility to determine your actions.

Stick with your DCA strategy to win.


10. Remove your Emotions

Most investors are:

- Illogical 

- Irrational

- Emotional

Markets are volatile and they don't have a pattern. 

Don't allow your emotions to have you sell or buy on an impulse. 

Stick to your strategy.


11. Stick to Your Process

You can win if you have a process. 

Create a framework that you can use to determine whether to:

- Sell a stock

- Buy a stock

- Hold a stock


A solid process will help you prevent your emotions from getting in the way of making impulse decisions.


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