If you are an individual investor who holds more than a half dozen individual stocks in your portfolio, you are almost certainly cheating yourself out of returns and taking on unnecessary risk. You are watching a three-minute TV news segment as a guest commentator encourages the audience to buy a bicycle shop. When the market falls, the anecdotes suddenly change, and investors without sound foundations panic and sell – locking in their losses. We believe that, for principal investors, risk is the inability to meet an economic need or desire due to a shortfall in available funds. Three simple points that, if diligently followed, are guaranteed to increase your investing confidence and make you a better investor.

Source: Forbes January 13, 2017 17:33 UTC