6. Valuation still matters. If you begin to believe “it’s different this time,” you are wrong – it’s not. When valuations are far above their historic levels, there is good reason to be concerned. Good companies may remain good companies, but they may not continue to be good stocks. When this basic principle of investing is ignored, you will eventually pay the price.
12. Market timing doesn’t work. Moving into and out of markets based on any anticipated changes in price as opposed to fundamental changes in value is speculation – not investing. Peter Lynch, the former manager of The Fidelity Magellan® Fund believes, “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves.”