5 Investing Basics from Ben Graham

The Intelligent Investor is considered to be the best book on value investing every written. The Fourth Edition, which contains Jason Zweig’s additional, more modern, commentary, is about 600 pages long.

It works best when investors dig into just a single chapter.

In the first chapter, Graham and Zweig both lay out 5 investing basics.

1.       A stock is not just a ticker. You actually own a business with underlying value.

2.       The stock market swings between bulls and bears. Have a plan.

3.       The future value of every investment is a function of its present price.

4.       You will be wrong. Have a “margin of safety.”

5.       Develop discipline and courage.

The fifth investing basic sounds so simple. Yet “discipline and courage” is the most difficult part about long-term investing.

-- Tracey Ryniec