What are investment decisions worth if they don’t take a broad view of the market and investments? Not much, since those decisions skip key components of successful investing.

Learning what not to do can be the hardest and costliest part of an investor’s education. We want to expand on this notion, since the idea applies to a wide range of narrow approaches to investing.

What are the key investment decisions and choices that investors should know about? To succeed as an investor, you have to take a broad view in making investment decisions. Technical analysis and other narrow views do sometimes seem to “work” for lengthy periods, of course. But they only work for a minority of the time, and they never work consistently.

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What are investment decisions that will lead to failure or success?

As with all random events, successes occur in bunches. These come with random beginning and end points—so it’s easy to see how this applies with technical analysis, which has an arcane air about it. But the same principles works for something as straightforward and commonsensical as, say, value investing.

Virtually all Successful Investors have some understanding of value investing, and many have some knowledge of technical analysis, and most have some knowledge of a variety of other tools and shortcuts. But virtually all Successful Investors take a broad view, and apply everything they know to their investing decisions.

As the saying goes, if you’re going to play the game, you might as well look at all your cards.

What are investment decisions for building a successful portfolio? Diversification and balance are two key ones

Your portfolio strategy should begin with a fundamental piece of advice that we underline frequently: Spread your money out across most if not all of the 5 main economic sectors (Finance, Utilities, Manufacturing, Resources, and the Consumer sector). The proportions should depend on your objectives and the risk you can accept. The Canadian Finance and Utilities sectors generally involve below-average risk. Manufacturing and Resources tend to be riskier, and the Consumer sector is in the middle.

As well, balance aggressive and conservative investments in your portfolio, in line with your investment objectives, and the market outlook. Above all, avoid the urge to become more aggressive as prices rise and more conservative as prices fall.

What are investment decisions for spinoff stocks?

Spinoffs are very often truly undervalued stocks. In one sense, a spinoff is the antithesis of a new issue. Companies sell new issues to the public when they feel it’s a good time to sell. They do spinoffs when they feel it’s not a good time to sell, often resulting in undervalued stocks. That probably means it’s a good time to buy.

When a spinoff begins trading, it stands to reason that investors will put a low price on it. After all, the spinoff hits the market with a large number of neutral, if not reluctant, stockholders who have limited expectations for it, and who are willing to sell when they get around to it.

One group of investors who might be willing to buy a new spinoff are seekers of undervalued stocks. On the whole, it pays to follow the lead of these value seekers. You should have the patience to hang on through a period of sluggish trading, while reluctant spinoff holders exercise their urge to sell.

Risk and reward potential exists in all investments—but you must drill down into the details to maximize reward and minimize risk

You have to learn a lot of things to become a Successful Investor, and few people learn them all in any logical progression. Instead, most of us move from one subject of interest to another, with a lot of zigs and zags in between.

That’s why some investors go through a phase when they know just enough about a particular investment to be a danger to themselves and others.

All investments come with a mix of risk and potential reward. The greatest danger comes when you understand the mechanics of an investment, but you’re missing some of the details. Your understanding of the potential reward can make you greedy, while the gaps in your knowledge limit your natural, healthy sense of skepticism.

Therefore, it’s important to maintain that healthy sense of skepticism.

If an investment sounds too good to be true, it probably isn’t true. Recognize, too, that some of your most promising investments will disappoint you, since no one can predict the future. But if you follow our Successful Investor strategy of diversifying and focusing your investments on well-established companies, your gains will offset your losses.

What are investment decisions you’ve made throughout your investing career that you would not make now?

We’ve all made some poor investment decisions. What is one of the worst you’ve made and what did you learn from it?