Rules of Thumb and Key Phrases: Gleaning the Nuggets of Truth

by Charles Trzcinka , Stephen M. Horan and Vahan Janjigian

Rules Of Thumb And Key Phrases: Gleaning The Nuggets Of Truth Splash image

Editor’s note: This article was excerpted with permission of the publisher, John Wiley & Sons Inc. from “The Forbes CFA Institute Investment Course: Timeless Principles for Building Wealth.” Copyright © 2011 by Forbes, LLC. More information about the book and a multimedia supplement are available at

Humorist Will Rogers was once asked for investment advice. He responded, “Buy a stock. When it goes up, sell it. If it doesn’t go up, don’t buy it.” Wall Street has many golden rules. While many of them may seem about as useful as Rogers’ advice, they all have an element of truth and carry the wisdom of years of experience.

You will notice, however, that some of these 22 tidbits of wisdom contradict one another. Furthermore, some are more useful than others, and some are of very questionable value. Our advice: Take them all with a grain of salt.

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Charles Trzcinka is a senior economist for the U.S. Securities and Exchange Commission, as well as the James W. & Virginia E. Cozad Chair in Finance at the Kelley School of Business, Indiana University, Bloomington. He is also co-author of Forbes/CFA Institute Investment Course (John Wiley & Sons, 2011).
Stephen M. Horan is a managing director and co-leads educational activities at CFA Institute.
Vahan Janjigian is a chief investment officer at Greenwich Wealth Management LLC and editor of the Money Masters Stock Report. He is also author of “Even Buffett Isn’t Perfect” (Portfolio, 2009) and co-author of Forbes/CFA Institute Investment Course (John Wiley & Sons, 2011).


Greg Anthony from Mississippi posted about 1 year ago:

Here's another one regarding being greedy and selling too late: "It's easier to live with lost opportunity than lost money".

Buck Bowling from Oregon posted about 1 year ago:

The entrepreneur and the investor are strangely aligned in one respect: i.e.,it takes guts to put one's wallet on the line.

John Portwood from Louisiana posted about 1 year ago:

Concerning number 13 "being more right than wrong": Investing is a game of hand grenades and horse shoes;close is good enough. Our stock selection hit ratio has been 55% to 57%, historically speaking, and that has been good enough to deliver more than satisfactory long -term returns.Just remember that you must periodically weed the garden and get rid of portfolio positions that no longer meet your particular investment criteria.

Ronald Zaremba from Washington posted about 1 year ago:

Actually, Daniel Drew's quote is " Anyone who plays the stock market not as an insider, is like a man buying cows in the moonlight." Source, "If Ignorance is Bliss,Smart Quotes for Dumb times" by John Lloyd and John Mitchinson

Ron Frend from California posted about 1 year ago:

I kind of like Woody Allen:

"Rich is better than poor,... if only for financial reasons."

Howard Becker from New York posted about 1 year ago:

good thoughts for new year.


Vaidy Bala from posted about 1 year ago:

Bottom line is good high school education and (plenty of) Common Sense, I will add high intensity to learn, will beat all who claim. Good Example: George Sorrows (spelling may be wrong), self taught Billionaire giving millions for charity since decades, there are other luminaries in the USA!

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