What are the principles of investing?

Investing principles, as highlighted by various experts, encompass a range of concepts:

• Principle-Based Decision Making: Using if-then statements to structure investment decisions based on principles that provide consistent winning outcomes over time. This helps to navigate daily decisions and have a long-term positive financial impact 1.

• Ray Dalio's Principles: Unconventional principles developed and used by Ray Dalio for creating unique results in life, business, and investing. Ray is notable for starting Bridgewater Associates from his apartment and growing it into a massive investment company 2.

• Uncorrelated Investments: Investing in uncorrelated assets can reduce risk without reducing returns, leading to what Ray Dalio calls the "Holy Grail of investing" 3.

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    1

    Investing Principles Unveiled

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    2

    Principles of Success

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    3

    Holy Grail of Investing

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    4

    Money Mastery

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    5

    Winning Investment Psychology

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    6

    Competitive Edge

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    7

    Investing Mindset

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    8

    Investment Principles

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• Money Habits: Understanding how to spend, save, invest, and borrow are foundational money principles. Avoiding overspending and unnecessary purchases while investing to allow money to grow are key practices 4.

• Behavioral Guardrails: Recognizing and mitigating your psychological blind spots through the principles that protect you from the worst parts of your psychology is essential for successful investing 5.

• Competitive Edge: Investing in areas with less competition can yield better deals and returns, as demonstrated by Sam Zell's real estate investment strategy 6.

• Balancing Optimism and Pessimism: Morgan Housel suggests saving like a pessimist and investing like an optimist, ensuring a balance between conservative personal finances and a belief in long-term growth 7.

• Portfolio Concentration: Richard Koch applies the 80/20 principle to his investments, focusing on a few key assets and increasing stakes in successful companies rather than diversification 8.

• Investment Psychology: Chamath Palihapitiya asserts that behavior and psychology play a crucial role in investing. Guardrails based on self-understanding can help one take bigger risks while staying protected from one's blind spots 5.

• Dollar Cost Averaging: Committing a fixed amount of money on a schedule helps overcome emotional biases and herd mentality 7.

Each of these principles provides a unique perspective on how to approach investing and can serve as a guideline for creating a successful investment strategy.