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📝 4 Simple Investing Rules to Live by in 2024

Dec 29, 2023

Good morning! 👋

There is not a lot going on in the news that we haven’t already talked about in great detail, so I thought we’d switch things up with a quick look at lessons drawn from this year’s market activity.

Why?

Simple.

Reflecting on the past can give us almost super-hero-like powers in the future.

Doing so allows us to develop insight into decisions we’ve made. Success becomes information we build upon. Mistakes become tuition. New knowledge becomes a foundation.

No doubt, you get where I’m going with this.

Looking backwards is the fuel that drives us forward and that’s as true in life as it is in the markets.

✔️ Plan your investing and invest your plan

Studies show beyond any shadow of a doubt that people who set specific goals are far more likely to achieve ‘em. Especially if they’re operating within a proven, rigorously researched framework like we are.

This year, for example, I encouraged you to focus on the largest tech companies because we identified Digitalization as an opportunity of epic proportions.

I hope you did.

Companies we’ve talked about frequently all year are at the top of the leaderboard.

As of last night, for example, NVDA, TSLA and PLTR have returned 241.21%, 105.31% and 173.44% YTD respectively – just to name a few. The S&P 500, by comparison, turned in 24.58%.

To be fair, people buying index funds or ETFs had a banner year and there’s nothing wrong with buying those things if doing so fits with your risk tolerance, objectives, and circumstances (none of which I know).

The point I want to make is that folks who took the time to focus on specific “must have” stocks with ultra-specific goals in mind had the opportunity to do considerably better.

They will again.

✔️ Use the right tactics at the right time

People constantly tell me they’re going to wait for a pullback or that they’ll buy less expensive stocks when they have the opportunity. Most chicken out when the time comes. Not surprisingly, many of these same folks fall farther behind every time there’s a pullback or a downdraft.

On the other hand, investors who buy into each downdraft and constantly add shares to the best companies tend to enjoy much better results. What’s more, folks who constantly harvest profits the way I’ve encouraged you to are always on the hunt, always have cash on hand to invest, almost always pull ahead over time.

✔️ Saying goodbye to guesswork

Many investing services and video channels are little more than glorified tip sheets focused on hot money. If that’s what you want, fine – there’s a role for that.

Just be careful.

A 2023 study of 29,000 “finfluencers” from the Swiss Finance Institute found that 56% gave “antiskilled” advice – meaning what they said led to negative returns when compared to the markets at large.

On the other hand, we’ve shared new insights into the Fed’s hiking cycle, learned to identify key market turning points and more. We’ve also talked extensively about how to recognize quality companies and discard those that may be hidden portfolio killers.

Invest in the best, ignore the rest has never been more relevant!

✔️ Investing in optimism pays

Loads of people fell for what I call “bear porn” this year and, predictably, they’ve paid a terrible price for having done so.

We, on the other hand, have stuck to what we know to be true including the market’s decidedly upside bias, the proven 5D framework, and a very concentrated universe of world-class companies making “must have” products and services.