A Timely Reminder on Investing -- In Anything

Bob Farrell was a legendary figure on Wall St. Here is how one brief magazine bio described him leading into a 2001 interview:

Farrell is senior investment advisor of Merrill Lynch and one of Wall Street's most highly respected stock market analysts. He's seen it all and done most of it, too; he is a many-time First Teamer in the market timing category of Institutional Investor magazine's All-America Research Team. As manager of market analysis, he pioneered the use of sentiment figures using Merrill Lynch internal data. In 1993, he was inducted into the Wall $treet Week Hall of Fame. Not only that, he is a founder of the Market Technicians Association and was its first president. His Weekly Market Commentary, published since 1970 by the firm, is followed by thousands of professional money managers all over the world. In his current role as senior investment advisor, he writes quarterly on longer-term theme changes in the market.

Over his decades on Wall St., Farrell came up with his 10 Market Rules to Remember. I've been meaning to post these for quite some time, but never got around to it. If you invest -- in anything -- these rules are most likely applicable. Take them to heart. Print them and post them right next to your monitor so you can review them the next time you're ready to make an investment decision. Follow them closely. They will not let you down.

Here they are:

1) Markets tend to return to the mean over time.

2) Excesses in one direction will lead to an opposite excess in the other direction.

3) There are no new eras -- excesses are never permanent.

4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.

5) The public buys the most at the top and the least at the bottom.

6) Fear and greed are stronger than long-term resolve.

7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names.

8) Bear markets have three stages -- sharp down, reflexive rebound, and a drawn-out fundamental downtrend.

9) When all the experts and forecasts agree -- something else is going to happen.

10) Bull markets are more fun than bear markets.

Read it. Print it. Learn it. Live it. You'll be glad you did.