Controlling the controllable

Recognize that investing is about controlling the controllable.

You can't control whether the stocks or funds you buy will outperform the market today, next week, this month, or this year; in the short run, your returns will always be hostage to Mr. Market and his whims.

But you can control:

• your brokerage costs, by trading rarely, patiently and cheaply.
• your ownership costs, by refusing to buy mutual funds with excessive annual expenses.
• your expectations, by using realism, not fantasy, to forecast your returns.
• your risk, by deciding how much of your total assets to put at hazard in the stock market, by diversifying, and by rebalancing.
• your tax bills, by holding stokcs for at least one year and, whenever possible, for at least five years, to lower your captal-gains liability.
• and, most of all, your own behaviour.