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 stocks for at least one year and, whenever possible, for at least five years, to lower your capital-gains liability
- and, most of all, your own behaviour.
Ref: cc Intelligent Investor by Benjamin Graham
