SMART INVESTOR: Here's The Math Rule Every Investor Should Keep In Mind

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Today's nugget of investing wisdom comes courtesy of a refreshing post from Joshua Brown of The Reformed Broker.

So often in investing, people feel the need to break out fancy trading equipment, glue themselves to their computers all day and employ a host of complicated math equations to make the best decisions.

Not so, says Brown: 

"The fancier the math one uses to justify an entrenched investment opinion, the more obscure and arcane the indicators employed, the more desperate and wrong that person is," he writes.

" We don't resort to algebraic equations when we're on the winning side of a trade and confident that we have gotten the broad strokes right. It is only when our backs are against the wall and the core beliefs we've publicly held have proven to be ineffective or incorrect that we resort to mining for "new" data from decades ago to re-prove our original thesis. This is more about saving face and nursing a bruised ego than it is about making money."

In fact, as an individual investor, you may have insights that the professionals who get paid to trade could never possess.



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