There is an excellent characteristic of stock investment that it can only go to zero.

All capital investments inherently suffer the risk of permanent capital loss. As an investor, it is your job to differentiate between market volatility and a permanentcapital loss. You can only achieve this when you fundamentally understand why you bought the asset in the first place.

Short-term price fluctuation is not the real risk. It is an opportunity.

Prices are adjusted up to the cumulative perception of risk of all market participants.

Over the long term, and I mean a very long term, markets are efficient.

In a rapidly rising market, the stretch of prices between two points of time is amplified, then so is the general public’s behavior towards prices.

Proper diversification can be achieved with a handful of assets. On the other hand, a poorly selected portfolio with hundreds of stocks and bonds can be inadequate for diversification purposes.

When you invest in stocks or any other asset, your primary risk is the permanent loss of capital. Your secondary risk is a sub-par return, and that’s it. You don’t have any other risk.

Cash and bank deposits are not risk-free investments. They suffer substantial hidden risks like inflation, credit, and foreign exchange.