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Rule 5: Stay Focused

In: Intelligent Investing in Irrational Markets

Author

Listed:
  • Panos Mourdoukoutas

    (LIU Post)

Abstract

Staying focused means three things: first, sticking with goals and priorities as defined in your financial plan, and the asset allocation and portfolio selection that serves these goals; second, adjust asset allocation and portfolio selection in response to changes in the macroeconomic and microeconomic conditions that give an advantage to one asset category over another, and to one stock over another. Third, stick with companies with sound economic fundamentals. Staying focused is easier said than done, as it takes patience, persistence, and discipline, very few investors can endure. Patience to perform “due-diligence,” to go over the economic and financial indicators that determine whether a company has sustainable competitive advantage and can maintain it; persistence to overcome the failures, setbacks, and temptations that may take you off your financial plan; and discipline to play the game right, to comply with all the rules and regulations: know what you are doing, work out all the details, and close your ears to sirens, who hype your emotions.

Suggested Citation

  • Panos Mourdoukoutas, 2013. "Rule 5: Stay Focused," Palgrave Macmillan Books, in: Intelligent Investing in Irrational Markets, chapter 5, pages 60-69, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-34289-8_6
    DOI: 10.1057/9781137342898_6
    as

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