Back to Basics: CornerCap's 10 Investment Principles to Follow, Whether Times Are Tough or Lush

/PRNewswire/ -- With so much volatility in the market and fears about the economy's outlook as the nation moves into a period of new national leadership, CornerCap Investment Counsel President James C. Carr outlined 10 Commandments of Investing he believes should ensure success, whether the times are 'tough' or 'lush'.

The full text of Carr's 10 Commandments, along with additional commentary on each, is published in the Winter edition of the firm's news letter. It is also available online and may be downloaded at no cost from www.cornercap.com/library/Newsletters/n2009win.pdf .

The 10 Commandments of Investing

1. The minimum investment horizon is 10 years. "If you don't stay in the market for 10 years, don't get into it at all," Carr says.

2. Have a disciplined and consistent investment philosophy and process.

3. The asset allocation in an investment portfolio controls most of the volatility in your investment returns. According to Carr, asset allocation has everything to do with personal goals, income needs, risk profile and the ability to accept risk. It has nothing to do with stock selection, market timing, or strategy to vary with market conditions.

4. Do not attempt to time the market or strategically allocate your investment mix because of what you think the market might do. "One thing is absolutely certain," Carr notes, "the market is dominated in the short term by hope, greed, and fear! There is commonly a disconnect between a company's valuation and the current market jawboning."

5. Don't tinker. "Stay with the plan once you have established your asset allocation and your investment horizon," Carr counsels.

6. Have a clear view of what financial success means to you.

7. Control your emotions. "Human emotions can cause you to do exactly the wrong thing at the wrong time," Carr advises.

8. The home repair industry gets most of its revenue from those at home who try to fix it themselves. Carr recommends getting an expert to help you implement your investment objectives. Know the four critical P's for selecting an investment advisor. They are People, Process, Philosophy and Performance.

9. Do not retain an investment advisor who doesn't fully agree with and implement the commandments set forth here.

10. Having done all of this, the key to success thereafter is benign neglect.

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