Rivkin Rules

Never chase stocks

Stick to our limits. You will usually be able to buy stocks below our limits if you are patient. A few cents saved on buys and sells will add up to percentages at the end of the year.

Diversify

Buy as many of our stocks as possible without allocating less than about $2000 to each one. No one is perfect, and we will get some wrong. The more stocks you buy, the lower the risk of losing capital. Similarly, we advise against placing all of your capital in only one stock (no matter how strongly we recommend a particular stock).

Buy stocks that suit your system

If we recommend a stock on a long-term basis, obviously it will not suit a short-term trader. Similarly, more speculative stocks may require you to keep a close eye on them, which is unsuitable for those who cannot afford the time to be watching the market daily.

Know your risk tolerance

Understand the notion of "Risk Profile". A speculative stock has a completely different risk profile to a low-risk yield play. Therefore, allocate capital according to the risk profile of the trade and your own risk tolerance. We know some experienced investors who do not like the dangers that come from speculative trading and will never touch them. That is a personal decision to be made by you. This is covered in greater detail in the accompanying brochure entitled "Discover your Investor Profile".

Minimum investment

Obviously, don't buy such small amounts that brokerage is going to take the lion's share of any profit. Generally, we recommend minimum share investments of about $2000.

Do not rush in

New investors should take their time and learn about the market before risking their capital. The market will always be there and we will find good money making opportunities regardless of the state of the market. We highly recommend paper trading to gain experience. It is not a race! Impatience is the enemy of investors.

Realistic returns

Warren Buffett, the world's greatest investor, has achieved an average annual return of about 25%. Do not be fooled into believing that the stock market will make you a millionaire overnight. Similarly, never forget how easy it is to lose money on the market. The long term average of the stock market is about 10% per annum.

Allocate capital based on downside risk and tolerance

One of our favourite rules is that if you are losing sleep over an investment, you either own too many or it is the wrong type of investment for you. This is obviously not a position that we recommend.