How To Become A Better Investor With Ray Dalio’s 5 Investing Principles

Read? How To Become A Better Investor With Ray Dalio’s 5 Investing Principles

Two of the five investing principles listed, Uncle8888 can relate them well. LOL!


3. Constantly compare your outcomes to your goals

Do you diligently compare your investment outcomes to your investment goals? It is common to see investors boasting about their investment goals without having a real measure to evaluate how close they are. Without a clear measure in place, you are unable to receive feedback on whether your investment decisions are right or wrong. This deprives you of the opportunity to improve your investment decision. After all, if you don’t measure your outcome, you are just living in denial that every decision that you make is correct, isn’t it?

CW8888:  Read? Setting Investing Goals and measuring investment outcome and performance


5. Pareto principle: Knowing where the 20% lies

Regardless of how successful you are as an investor, it is unlikely that every stock that you picked will be a winner. Successful investors have recognised that 80% of their portfolio’s return is attributable to 20% of the portfolio. Rather than diversifying their effort to find multiple stocks with mediocre returns, investors like Ray Dalio focus a great deal of time researching for great businesses to become that 20% in their portfolio.

Read? Laws that are applicable to investing