After investing and advising clients for over 40 years, I believe I have seen every kind of market imaginable. I’ve seen bull markets, bear markets, interest rates as low as zero and as high as 19%. I’ve experienced bubbles building and bubbles bursting. I’ve seen companies with no assets or revenues trade at more than $1 billion valuations and I’ve seen quality companies trade at valuations less than current cash. So, what are some of the major lessons that I have learned?

1. Know that sizzle sells better than steak. Overvalued stocks become more overvalued…until they don’t–and that has potential to end badly.
2. Buying stocks at new highs typically works better than buying stocks at new lows.
3. When you have a big winner, sell some and hope you are wrong.
4. If you insist on buying stocks on margin, never meet a margin call. Sell as there is a strong possibility that you are wrong.
5. I believe corporate officers and directors of public companies, collectively, are often good indicators of the economic outlook in the next 6-12 months. If they are selling at a fervor pace, be extra cautious and strive to take risk off the table.
6. Diversification and asset allocation based on a long-term financial plan works. Be disciplined and diversify asset class, diversify management style, and rebalance regularly to your financial plan and market conditions.
7. If your Uber driver is talking about a hot stock that’s in the news often, you might consider selling!
8. There is often very little to be gained by having more than 2/3 of your allocation in stocks as the risk/reward can prove unfavorable.
9. The two biggest killers of the very wealthy are overconcentration and leverage. Once you’ve gotten wealthy, I believe you should avoid both.
10. Never fight the Federal Reserve but recognize that the bond market sets rates, not the Fed. This is a rare instance where the tail wags the dog.

Happy investing and be careful out there,
Kevin G. Burns

Disclosure: This material by Coastal Bridge Advisors is for informational purposes only and is presented solely as an illustration of the typical advisor experience. Unique client experiences and past performance do not guarantee future results. All opinions expressed in this piece are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. Coastal Bridge Advisors does not provide tax or legal or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future returns; please seek advice from a licensed professional.