How not to lose your money in stocks, etc.

This is better than ten zillion books you can buy at the airports.  Perhaps it will save sleep and real money.

One thing I can add is that the movement over time of the yield curve can also give an idea of turning points in the stock market; but it is only an idea.  When the yield curve “inverts” (when short- term interest rates are at or higher than long-term interest rates), stocks may be in a bubble that could burst anytime.

Alternatively, one can do a simple Simon strategy:  just say no when stocks are bubbly.  The trick is to know when.  The best answer is that a bubble exists when just about every Juan (or Tom, Dick, Harry) talks about how great the stock market is.  Usually there is a healthy balance between optimists and pessimists; so bubbles don’t come very often.  This means it’s okay to adopt a long-term buy-and-hold rule, EXCEPT that you shouldn’t buy into a bubble.

Hat tip to The Reformed Broker.

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