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The Philosophy of Investing
Posted on August 27th, 2007 No commentsWhether you are a twenty-year veteran of investment banking or a fresh graduate from business school out looking for their job, there are some very basic premises of investing that have held true for a very long time.
Avoid putting all your financial eggs in a single basket. If you trip on a rock and the eggs go flying out, you will be very lucky to recover one or two that has not been cracked by the fall.
The higher the yield, the higher the risk. Think of risk as the probability of not getting your money back even when you have a signed receipt for it.
If it is too good to be true, it probably is. Try to look out for the catch.
Finally, consider investing in a company that actually makes something. Forget paper tigers and just go old school again.
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