“Experience is the name everyone gives to their mistakes.”
                                                                                 -Oscar Wilde

As such, we should learn from mistakes. This list of 12 volatile market strategies should help you plan future market strategies, so you can do less learning and more earning:

1. “Short-term investing” is an oxymoron. Put bluntly, a short-term financial focus is speculation, not investing. Investing is a fundamental commitment of your capital to the pursuit of the greater goals in your life–an independent retirement, the education of your children or grandchildren, a legacy for your heirs.
2. Valuation still matters. When valuations are far above historic levels, there’s reason for concern. Good companies may remain good companies, but they may not continue to be good stocks. When this basic principle of investing is ignored, you’ll eventually pay the price.
3. Markets go through cycles. Effective investing during market cycles requires uneasy decision-making. When markets are optimistic and exuberant, we should be cautious and ask why. When they’re pessimistic, we should see long-term investing opportunity. At all times, follow a written plan for discipline to help through the tough times. Sir John Templeton, a founder of modern investing, believes the real buying opportunities are at the time of maximum pessimism when “blood is in the streets.”
4. Asset allocation is a diversification strategy that works. It can’t offer a guarantee against short-term market losses, but it is an effective investment risk management tool. Sector concentration, no matter how attractive the sector may appear, is speculation.
5. There’s no opportunity for return without risk. If you don’t see the risk...keep looking. It’s there. Once you find it and understand it, it may be acceptable. But until you identify the risks, they’re unacceptable.
6. Most dollars flow into highperforming investments after the performance has occurred. The single most abused tactic is for investors to chase last year’s performance. Disciplined investors avoid this mistake.
7. Market indexes can tell a very distorted story. The success or failure of your investment plan shouldn’t be measured against any single index, only whether it meets your long-term goals over a full market cycle.
8. A well-balanced portfolio should be diversified among the major asset classes. Cash. Fixed income. Large and small companies. Growth and value. Domestic and international. The only guarantee is that some of these areas periodically disappoint. But you never know which ones or when. Your plan will succeed only if you stick with it and remain diversified.
9. Years of high returns can be reversed by one bad year. That’s why you shouldn’t use short-term criteria to judge long-term results. Consistency is more important than an occasional “home run.”
10. The traditional rules of investing are still true. While they can be adjusted to fit changing economic environments, never abandon the core principles of diversification, sound values, patience, sound planning and maintaining a longterm perspective.
11. Raw information isn’t knowledge. The financial media–TV, radio, newspapers, magazines, the Internet–survives on stimulating emotion, rather than discipline and sound planning.
12. Market timing doesn’t work. Moving in and out of markets based on anticipation is speculation–not investing.

Reviewing these 12 principles should reaffirm your basic investment planning process and strengthen your resolve to remember and apply these lessons in the future.

K. Kenneth Wu, MBA, ChFC is aregistered representative
and investment advisor of Lincoln Financial AdvisorsCorp.
He can be reached at (904) 354-3726 or kwu@lnc.com.