TIMELESS RULES FOR EQUITY INVESTORS

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

Investing in the stock market requires a great deal of discipline. It's easy to lose sight of long-term objectives when other investors are taking profits and experts are predicting a major market correction.

Following are eight timeless rules for those who choose to invest in the stock market. These rules will help you focus on your original investment objectives and make decisions based on the long-term outlook rather than current market conditions.

1. Don't put all your eggs in one basket. When you invest in a number of stocks, you protect yourself should one stock perform poorly. Mutual funds are an excellent way to diversify your equity dollars; they offer the benefits of professional management, and even a small investment can be diversified among several stocks.

2. Base your investment choices on facts rather than tips or well-meant advice. Investing and speculating are not the same; high reward usually involves high risk.

3. If the stock is attractive, eighths and quarters on the price don't matter.

4. Try to understand what the market is "saying" a stock is worth rather than attempting to "tell" the market what it is worth. One investor cannot force his or her opinion of a stock on an entire market of investors.

5. It is time in the market, not timing the market, that creates wealth. There is more risk of failing to meet your financial goals by being out of the market than by being in the market.

6. Don't cut your flowers and water your weeds. Don't sell a stock simply to take a profit, and don't keep a stock simply because it was once attractive. If the investment no longer meets your investment goals, cut your losses and move on.

7. Don't be panicked by news flashes or rumors. Instead, consider the information impartially, and base your decision on fact rather than emotion. They say investing is like riding a roller coaster. Jump off in the middle of the ride, and you're bound to get hurt.

8. Don't lose sight of why you invested in a stock in the first place. You're in the market to protect and, if possible, to increase your capital, not to prove how well you can pinpoint market highs and lows.

Many of us have heard these rules before, but it's easy to base investment decisions on emotion rather than fact. If you have concerns about your stocks, contact your investment representative. He or she is there to answer questions. Together, you can decide whether those investments still have a place in your portfolio and what action, if any, is needed.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.