Posted by Rob Minton
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In June's issue of Kiplinger's Personal Finance, one of the leading money magazines in the country, Editor-in-Chief Knight Kiplinger wrote a piece titled "An Investor's Manifesto." It is a 20-item list of guidelines for his personal investing.
I don't want to reprint the entire piece, but you can see it in whole form here.
Dictionary.com defines "manifesto" as:
"a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization."
So Kiplinger's manifesto is a public declaration of opinions, objectives and motives for his investing. Do you have an investor's manifesto? After I read this piece, I thought that every investor should probably have a documented list of personal objectives, principles and guidelines that he or she follows.
Some of the highlights from Kiplinger's 20-item manifesto:
I know that higher returns entail higher risk, in every kind of asset.
I accept those risks, but I mitigate them by owning a diversity of assets.
I stick with my game plan. I do not check the value of my investments every day or even every week.
I try to keep my cool when other folks are losing theirs.
But maybe his No. 1 rule, which he does put at the top of his list:
I am an investor. I do not trade my assets frequently. That's speculation, not investing.
I think this is one of the most important things we, as investors, need to remember. Jumping into and out of the next "hot" thing IS speculation. We need to remind ourselves some times that investing is a process, not an event. It's long-term. This requires discipline, so having a written reminder is a good tool.
And Kiplinger lists "I am an investor" at the top of his guiding principles, but No. 20, the final one, is "I remind myself often: I am an investor." For him, it begins and ends with that simple principle.
His other rules have probably kept Kiplinger in decent financial health during this financial crisis we are in. He tries to keep his cool when other folks are losing theirs. He sticks with his game plan. He views his home as a place to live, not a replacement for a retirement savings plan.
Pretty smart rules to invest by. What are yours?
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