9. Limit The Magnitude Of Errors
Errors will cost you money and how much will depend on the scope of the error. Yes, if you wanted to absolutely avoid mistakes you wouldn't take any action and that would still spell failure. But you also need the diligence to limit the impact of errors on your investment. Warren Buffet has been ascribed the saying that "an investor needs to do very few things right, as long as he or she avoids big mistakes". How do you limit the scope of errors? That's where you need a set of personal rules for buying and selling. Does that stock qualify for your money at its current price? You look at key factors like the margin of safety between its price and your valuation, internal capacity and sustainability of performance, corporate governance and integrity, etc. Does the company pass your buy-test? If you buy, when must you exit? You need sell-rules that optimise earnings and firmly limits loses. If you protect your investment with a set of tidy operational parameters, your value can only go up.

10. Know That The Bigger Stage Counts
If you concentrate on your specific stock, you will miss the connect between it and the macro-economic outlook and, in particular, impending government policies. In our economy that is dominantly driven by the government, what happens or is in the works in the chambers of government is critical to business performance and, in many cases, the performance of your investment. Learn to monitor these things and to tie them to the fate of your investment, measuring the correlation. For instance, while bank consolidation in 2005 has been hailed as a huge success, do you realise that some investors had large holdings in the banks that failed to survive? Was it possible to have bailed out before the cookie crumbled? Sectoral/industry developments should also interest you. These things may not affect your stock, but don't take things for granted.

11. Learn To Be Dispassionate
A lot of investment errors can be traced to investor sentiment! It's easy to become emotionally attached to a stock: the lure of attending shareholders' AGMs and feeling like an owner could becloud your judgment. You might just like the name or profile of a company and want to be part of it. You could feel, while a company is on a slide, that you've had great years with this company and that just can't change. We all have these emotional attachments, one way or the other. The reality is that investing in stocks is a business and a serious one at that. It needs clear-headed, dispassionate analysis and decisions, not sentiment. You must learn, for instance, when to sell off a loser, no matter how much you've loved the company. A serious investor will have a preset loss-limit and apply it firmly.

12. Ride Out A Winner, But Watch Your Back
It just happens occasionally: when you've got things right on target and your investment goes off on a sustained upward price ride. Perhaps that's when the Heavens want to bless your patience and commitment and you have a rare chance to boost your investment. The problem is that it's often difficult to wait out such a bull-ride for fear of a price reversal. If you already have a sell rule to offload at certain margin of gain, you'd want to stick to it. But why cut your gain? One approach to extend your profit is to apply the scaling out formula: a phased profit-taking approach.

Mastering Investment-now

Capital Appreciation Refers to the increase in the market value of your investment due to risen market price. If price gains push up the price of your stock, or the market value of your property or other asset, that's capital appreciation. The two pillars of reward to stock investors are dividend (including bonus shares) and capital appreciation. Get targeted investment info, tips and ideas from our top-rated newsletter.

13. Your Portfolio Needs Periodic Review
If you've build a portfolio that's good to withstand shock, the truth is that this may only be for a while. Things keep changing and many unfolding variables can easily alter the equation, rendering your portfolio less portent. For instance, you're getting older everyday, your family could be larger, some economic sectors might be in a boom or burst, etc. That's why you need periodic re-assessment of your portfolio. Do you need to re-balance it? Some re-allocation of assets may be necessary and you should effect that.

14. Not Every Price Movement Counts
Well, the idea is that you don't need to panic and be overly anxious and possibly embark on precipitate action, just because of short-lived movements in price. Market prices are hardly steady and indeed will swing in both directions over the short-term. Some times, this is purely attributable to profit-taking by some investors. While active traders bother about price movements even over various hours of the day and can make or lose money on them, you are a long-term investor and should focus on different parameters: the fundamentals of the company. Buying and selling shares has a significant transactions cost and you can only reasonably take these costs when the calculations really justify it.

15. Be Focused And Committed To Loading Up
Your rules on saving should hold. The best way is to make it a first charge on your income. Don't make saving for investment a residual item. It's more important than other items you want to spend money on. To give more leeway to your savings plan, you have to tighten the noose on spending. Cut off as much of the discretionary consumption as you can. Of course basic family needs won't qualify as discretionary spending. But for frivolities, be ruthless if you like. After all, even when it's a household asset, its value begins to depreciate immediately you acquire it and will never rise again. Only investments can give you appreciation in value and achieve accumulation of wealth. Learn some basic lessons in personal budgeting to help you get a grip.

16. Be Disciplined and Confident
Being disciplined requires that you set your rules of engagement and you stick to them. You will be confident that if you have followed the rules you carefully set, you'll worry less about market noise. A lot of rumours and opinion will be bandied in the market. Will they all count? Not really. If you've followed the key factors and made dispassionate judgment, you can sleep with that, notwithstanding the flow of the crowd. This is not to totally discountenance market information or 'analysts' views. It's just that you must do your homework and make every other factor secondary.

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» 16 Hot Winning Tips For Stock Investing From Top Pros (Part 1)