With thousands of investments and zillions of competing strategies vying for investors’ allegiance, it can be tempting to fall back on a few simple rules of thumb. Such often-repeated and seemingly time-proven investing axioms are valuable because they “give people a basis to get started investing” and on a path to improved long-term financial security, says Kathy Carey, who is director of private wealth management research for investment firm Baird.
But just like simplistic medical advice, these bromides don’t help all people in all situations. Chicken soup has many curative properties, but isn’t a fix for a broken leg, after all. And in many cases, following some investing prescriptions without adjusting for your own circumstances could end up damaging your returns, Carey says. To help you personalize the maxims and maximize your returns, consider the nuances of some oft-quoted adages.
