Rule #1

Phil Town now counts himself a wealthy man, but he began with very little. At one point he was getting by on about $4,000 a year. A piece of well-timed advice sent him off to teach himself how investing really works, and along the way he worked out which rules matter and how to turn them to his advantage. The first and most important of these gives the book its title: don't lose money. This updated edition of his bestseller lays out a set of contrarian principles. Town argues against diversifying, says a stock should be bought only when it is priced below its worth, and recommends planning for the long term while acting with discipline in the short term to improve returns. His broader aim is to let ordinary investors compete with the professionals by using the same kinds of tools the big institutions rely on. Town is skeptical of large mutual funds, which he says tend to drift back toward average results, and he points out that in recent years that average has often been disappointing. In their place, the book offers a do-it-yourself method presented step by step. It is written to be usable even by readers who are nervous about investing, and it is meant to help them build financial security whichever way the market moves.