The Grouch's Investor Manifesto

1. I am an investor, not a speculator.  I invest in stocks, bonds and other assets for their long-term returns and to participate in the growth of the economy, and do not seek short-term gains in the casino of speculation.
2. I am a net saver, not a debtor.  Part of each paycheck automatically goes toward investments, in addition to any other unneeded cash beyond what is required for my emergency fund.
3. I have an investment plan written down on paper that includes personal and financial goals (the reasons that I am saving and investing) as well as an asset allocation strategy and a strategy to minimize taxes in my non-tax deferred accounts.
4. I know that every investment entails risk, even bank deposits, CDs and government bonds whose value can be eroded by inflation or debased currencies.
5. My asset allocation strategy mitigates the risks of investing through broad diversification, and preparing for both good and bad economic times.
6. I seek out the lowest cost investment options that satisfy my asset allocation strategy, because I know cost is the greatest predictor of future performance, and I do not rely on star managers.
7. I invest at regular intervals in both up and down markets and let dollar cost averaging work its magic.
8. I do not invest in fads or the latest hot market.  I stick with my asset allocation strategy through thick and thin.
9. I tune my asset allocation to match my risk tolerance.  As I get older with less time to recover from downturns, my asset allocation will get more risk adverse.
10. I realize the stock market is risky in the short term but not too risky in the long-term.  I allocate to equities only what money I won't need for the next 3-5 years, and know that equities are necessary to achieve my portfolio growth targets and keep up with inflation.
11. I rebalance my portfolio at least once a year, forcing myself to sell high and buy low to maintain the proper asset allocation for my risk tolerance.
12. Foreign equities count for at least 30% of my equity portfolio.  I recognize that globalization and the growth of economic freedom around the world means the developed economies will not have a monopoly on growth.
13. I never borrow against my 401K or investment portfolio.  If I don't have the cash for something, I don't need it, and I will not put my nest egg at risk for frivolous things.
14. I have an emergency fund equal to 6 months of salary so that I can weather the bad times and deal with the unexpected without dipping into my investment accounts.
15. I know my house is a place to live, not an investment.  As much as I may love and enjoy my house, it is not a retirement plan or a substitute for saving and investing.
16. I stick with the plan and keep my cool even when others are loosing their heads.  The best bargains exist and the most money is made when a fire sale happens on Wall Street.  I will be ready to take advantage of those fire sales.
17. I will participate in the long-term growth of human-kind, their genius and innovations, because I am an investor, a saver, and an optimist who believes goodness will always be rewarded.