Pond's Laws on Investing

On Investing

Pond’s Law of Investment Risk
The biggest risk in investing is taking no risk at all.

Pond’s Law of Happiness
Happiness is a dull portfolio.

Pond’s Law of “A Watched Portfolio Never Boils”
The more frequently you check how your portfolio is performing, the worse your portfolio will perform.

Pond’s Law of Insomnia
For every ten minutes you spend during the day worrying about your investments, you will lose one hour’s sleep that night.

Pond’s Law of Investment Anxiety
The higher the stock market rises, the more anxious investors become. When it reaches all-time highs, investors start hoping for a decline to relieve their anxiety.

Pond’s Law of Bull Markets
A bull market causes people to live higher off the hog. The stronger the bull market, the higher off the hog you live—until your consumption habit resemble the eating habits of a pig.

Pond’s Law of Day Trading
Anyone who becomes a day trader will reinvest any and all winning investments until such time as he or she has lost all past gains—and then some.

Pond’s Laws of Market Timing
1. Anyone who tells you that he or she can time the market is delusional.
2. Anyone who sells their investments just before or during a market decline will not buy them again until the market has risen to a level that is higher than when they sold.

Ponds Law of Urgency
The faster you have to send in money to take advantage of a once-in-a-lifetime investment opportunity, the faster you will lose all of it.

On Mutual Funds

Pond’s Laws of Mutual Funds
1. A heretofore excellent mutual fund’s performance will deteriorate right after you buy it.
2. The performance of a fund will collapse shortly after it is featured by a financial publication as one of the best.
3. A mediocre mutual fund will begin to outperform its peers right after you sell it.

On Stocks

Pond’s Law of Sentimental Investing
If you feel compelled to hold onto an ancestor’s stock for sentimental reasons, you should hold onto just one share.

Pond’s Law of Stock Market Wisdom
In order to buy a share of stock, someone has to sell that same share, and both the buyer and the seller think they’ve made the right decision.

Pond’s Law of Stock Market Prediction
The most successful Wall Street prognosticators are able to predict accurately whether the market will fall or rise 50 percent of the time.