How True Are These Investing Cliches?

We examine how much faith you can put into these investment adages.

Hand with a watering can watering the money tree. The concept of financial growth. Deposit. Vector illustration. Objects are isolated.
(Image credit: Getty)

With thousands of investments and zillions of competing strategies vying for investors’ allegiance, it can be tempting to fall back on a few simple rules of thumb. Such often-repeated and seemingly time-proven investing axioms are valuable because they “give people a basis to get started investing” and on a path to improved long-term financial security, says Kathy Carey, who is director of private wealth management research for investment firm Baird

But just like simplistic medical advice, these bromides don’t help all people in all situations. Chicken soup has many curative properties, but isn’t a fix for a broken leg, after all. And in many cases, following some investing prescriptions without adjusting for your own circumstances could end up damaging your returns, Carey says. To help you personalize the maxims and maximize your returns, consider the nuances of some oft-quoted adages.

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Kim Clark
Senior Associate Editor, Kiplinger's Personal Finance

Kim Clark is a veteran financial journalist who has worked at Fortune, U.S News & World Report and Money magazines. She was part of a team that won a Gerald Loeb award for coverage of elder finances, and she won the Education Writers Association's top magazine investigative prize for exposing insurance agents who used false claims about college financial aid to sell policies. As a Kiplinger Fellow at Ohio State University, she studied delivery of digital news and information. Most recently, she worked as a deputy director of the Education Writers Association, leading the training of higher education journalists around the country. She is also a prize-winning gardener, and in her spare time, picks up litter.