Introduction and Intentions
My intention in writing Lessons for Long-Term Investors was to enlighten investors (whether they are beginners or advanced) as to what is possible in the long run with their risk tolerance in mind and with a reasonable amount of time devoted to their investments.
Key Takeaways
The key takeaway is that this is not as complicated and shouldn’t be as intimidating as advertised. Anyone can do it well. And pay attention to all 13 Laws. The best specific piece of advice is to manage risk. The return takes care of itself.
Long-Term vs Short-Term Investing
The book is strictly for long-term investors as the title implies. In fact, short-term investors many times wind up abandoning their strategy.
Risk Management and Diversification
Diversification is truly the only free lunch in investing. It enables most investors to sleep at night. Diversification can take on many shapes. One can diversify between growth investing and value investing, between large companies, mid-sized companies, and small companies, and even between sectors of the economy such as Technology, Health Care, Industrials, Communications, Materials, Utilities, etc. The biggest decision is how to diversify between Asset Classes such as Stocks, Bonds, Cash and CD’s, Real Estate, Gold, and Alternative Assets such as art and Collectibles.
Behavioral Finance and Emotional Biases
Emotions play a huge role in all this. One must know himself/herself before and during their investing years. Investing is about using rational thinking. Emotionalism leads to bad decisions. Money losing moves are found in Law 13. Most people’s biggest problem in investing is controlling emotions. If one is a long-term investor that in and of itself will help when the market gets volatile. Human reaction to good or bad news is to overreact. The first thing to do to combat this is to ask yourself if your financial goals have changed. If not, then short-term swings shouldn’t matter, and no action should be taken. Trust the history of financial markets.
Compounding and Time in the Market
When Einstein was asked what the greatest invention of mankind was, he replied “Compound Interest.” That is in the third section of the book. It is so true. One just needs to read the Penny Example as well. It is all very self-explanatory. Timing the Market is a loser’s game. No one has ever been consistently successful at it. I believe it to be a waste of time, and eventually money.
Sustainable and Ethical Investing
This is mostly a value choice for each investor. However, it has been shown that ESG investing has produced very good and sometimes superior returns with all else being equal.
Real Life Examples and Case Studies
The book does not include actual case studies. Each person will be his own case study over time.
Investment Education and Learning Resources
Additional Resources will always consist of information that aligns with the philosophy of the book, which is long-term investing. Podcasts are also a good source, but keep in mind to create a great filter in that the only opinion that matters is yours and your own philosophy should always prevail unless it is proven incorrect.
Personal Investment Goals and Strategies
This seems self-explanatory in that your goals are your goals and for the investors whose goals align with the book, they can build upon their knowledge and investing acumen.
Challenges and Concerns
Since the book is all about long-term investing, it is incumbent upon all readers to gain knowledge of all counter arguments about the perspective presented.
Applying Lessons to Real Life
Some investors start slowly and gradually gravitate to the strategy that works best for them from a risk/return point of view and given the amount of time that can devote to their investments. Measuring one’s success is extremely important. It will encourage and enable changes as you go.
Find the Author
Lessons for Long Term Investors
Master These Lessons and Become a Successful Investor!
Do you want to create more wealth? Do you want to maintain or even add to your standard of living now and during retirement? Now you can if you follow the concepts of this book. With this book, noted investment consultant Richard Rodman shows you:
- A wealth creation formula that WORKS!
- How to manage fear and greed–the two emotions that preclude sound investing
- How to put financial markets in their proper perspective and not in the perspective of the media, which mostly reports on short term market swings
- How to capitalize on bad news and market turmoil
This book is a distillation of over 50 years of sound investment advice and practice. It is a companion book to Rodman’s first book, The 17 Laws of Successful Investing, and companion text to his popular seminar, How to Create and Manage Wealth, as well as continuing education material for CPAs. In clear language and powerful examples compiled from many years of his newsletters, Rodman makes long-term investing understandable, easy, and attainable for virtually anyone in any income bracket. In these pages you will hopefully discover a new financial reality in today’s tumultuous world. Your future may actually depend on following these time-honored concepts. Ignore them at your own financial risks.
