The Ten Commandments - Revisited
The Ten Commandments, produced and directed by Cecille B. Demille, is an epic movie production that was released sixty four years ago this month. DeMille was considered the “founding father” of cinema. This was his last and most profitable film. The movie starred Charlton Heston as Moses, and the cast included Yul Brenner as Ramses and Yvonne DiCarlo as Zipporah. DiCarlo went on to star in one of my childhood favorite TV shows, The Munsters.
The movie’s running lengths is 220 minutes, yes it lasts for three hours and forty minutes not including commercials. Perhaps that explains why it is rarely shown anymore.
Meanwhile, another “Ten Commandments” is rarely viewed. My website contains a page that lists “Ten Commandments to Successful Investing”. This page is rarely visited, according to the statistics I get from our website tracking company. Maybe you have overlooked it because the website has too much information. Or perhaps you just do not have time to look around and see what types of information are available on our website. That’s understandable. I’d like to change that.
Here is a link to “The Ten Commandments of Successful Investing”: Ten Commandments to Successful Investing
This document was originally written by me in 1997. I was stuck in traffic on I-95 coming back from my company’s headquarters in Baltimore. I wanted to put together some basic truths about investing that would withstand the test of time. The tech boom of the 1990’s was beginning, although it would be another two years until it took over in earnest. It was well before the mortgage mess of the 2007-2008, and of course it was before the Covid Crisis of 2020. These simple rules of investing remain valuable.
Establish your objectives. Why are you investing? Are you saving for retirement or a college education? No matter what your reason, if you don’t know your why, it makes the process difficult.
Determine your resources. You may be aware of some or most of your resources, but have you ever sat down and listed all of them? Is your tolerance for risk a resource you can use to your advantage? I encourage people to really consider all of their resources, including their willingness to engage professionals to help with their investments and financial planning.
Asset Allocate. Diversify. These two commandments go hand-in-hand, yet sometimes are overlooked. While we know we need to own different types of assets and diversify, we often fail to maintain these principles. Fear and greed seem to overwhelm our discipline and logic, at times.
Buy Good Companies at Great Prices. Buy Great Companies at Good Prices. This commandment concerns understanding the need to own high quality value AND growth companies, and also reflects the fact that the price you pay for a stock effects your returns.
Sell Losses. This is the hardest one to keep, if you ask me.
Chunk In. Tier Out. Disciplined buying and selling is highly beneficial. Good tactical advice, we see the impact of this buying and selling technique in highly volatile markets like the one we have had for the past ten months.
Be Patient!!! Just yesterday, a client told me “I’m a long term investor. You’ve been telling me that for years.” Patience pays off because compounding returns are how REAL money is made over time.
You and Your Family are Sacred; your investments are not. In this year of immense turmoil revolving around a global health pandemic, this message rings even truer.
I hope this last commandment is meaningful to you, and perhaps the other nine as well. All were written with the intent to improve your financial health and well-being so you can pursue the life you wish to live. Peace be with you and your family this Thanksgiving.
Ralph McDevitt November 20, 2020
Any opinions are those of Ralph McDevitt and not necessarily those of Raymond James.
