Scientist's post and this post show how far apart people can be. All is well. This thread shows the spectrum of viewpoints as well.
The initial focus on the single rule offered certainly is true in different ways for different people. That will never change.
I address "rules" from the point of view of making "real" money.
No real money is made until you increase your purchasing power. Any ROI done by anyone anywhere has to be high enough to increase capitalization buying power.
The majority do not increase their buying power. You can rank a dozen trading methods and draw a line. Below the line people, institutions, funds do not make money. They have profits but the profitsare not enough to increase buying power year to year.
Here is an example of the point I am making: Ten years (1982 to 1992) of Vanguard data. The annual rate of return of S&P 500 index 16.2%.The annual rate of return of managed equity funds (Mutual funds) 13.6. Finally the annual rate of return of management companies (stock in the mutual fund companies) 65.9%.
What is big and what is small here. S&P index stocks are a big thing. Mutual funds being managed are a big thing. A few companies are a relatively small thing. Big things do not make money. Small things do make money.
In this example the majority is represented by S&P and Mutual funds. One company like Vanguard is a small equity owned company. I chose Vanguard because it's company is small a minority. This example wipes and drags across the floor the idea that the majority is what makes money.
The fact is, and it is a deep one to consider, is this: The vast majority sets the standard of wealth and what real buying power really is. There is no increase in buying power relative to S&P. Mutual Fund investments do less well than S&P. Both of these places to put capital does not increase the buying power of anyone. This is the definition of standing still.
No one may believe that they are making money following the majority. It is absolutely a fact that if you side with the majority, you are locked into the status quo and do not build "buying power". You simply rise with the tide like everyone else and if you replace anything you have, like a home, you are not one step ahead in your new replacement home no matter what the old and new home purchase price difference was. If you persist in following the majority investment strategies, you are just standing still or walking in place going nowhere fast.
I could post an alternative set of rules for making money; for building real buying power. I could do it in 8 different complete excellent approaches using the same underlying principles. Many approaches use the same underlying principles. A very few principles are involved or needed. They are not complex either.
One of those principles is this: you may not do what the majority does to make money to have a result that increases your buying power. This principle is built on the basic idea that the majority set the moving standard of constant unincreasing buying power as a de facto standard. QED.
Someone posted the principle and I commented at that time. No one has come up with other underlying principles so far.
It is not difficult at all to select a set of tools to play the market An excellent comprehensive approach). You simply use those tools in accordance with the underlying principles. I could make 8 additional separate posts to illustrate this point not using any over lapping tools, even. The result is always the same for each. They all make many times the money that the majority make. All the majority does year after year is set the level of what everyone had to do to stay even in their buying power.
This is not an arrogant statement this is just an observation like one of several I am making in ET. It is a definite wakeup call for learning how to measure whether you are making enough money to increase your buying power; if not wake up!
I note with sadness that one of my mentors and role models has died: Franco Modigliani, Professor Emeritus, MIT and 1985 Noble Prize winner for the Life-Cycle Hypothesis.