Investing is a fundamental aspect of personal finance that holds immense importance in building wealth, achieving financial goals and securing a prosperous future.
By allocating funds to various investment vehicles, people have the potential to grow their wealth, beat inflation and generate passive income.
Investing also plays a critical role in retirement planning, allowing one to accumulate a substantial nest egg over time.
Although investments can be a powerful tool for wealth creation and financial security, it requires knowledge and a strategic approach.
The golden rules of investing provide valuable principles to guide people in making informed decisions and increasing their chances of success in the investment world.
These rules are time-tested and proven strategies that have been embraced by seasoned investors.
By understanding and applying these rules, people can set clear investment goals, diversify their portfolios, adopt a long-term perspective and maintain discipline.
Whether you are a novice investor or have some experience in the market, these golden rules will serve as a foundation for making wise investment decisions and maximising your financial potential.
1. Start today
If there was an eighth wonder in the world, it would be compound interest. Let’s understand the power of compounding with an example:
Let’s suppose two friends, Riya and Shreya, start investing $5,000 a year until they are 65 years old.
Assuming an average annual return of 10 per cent, Riya starts investing at the age of 25 while Shreya begins at the age of 35.
While the difference between the amount invested by Riya and Shreya would be only $50,000, the difference in the funds accumulated by the time they turn 65 years would differ by about $950,000.
Riya would have $1.49 million, while Shreya would have only $545,000. That is the benefit of starting early, as compound interest grows your money significantly.
2. Stick to a systematic investment plan
Investors need to keep their emotions in control while investing in markets.
As American investor and author Peter Lynch once said: “Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”
This is because selling out of fear keeps investors out of the market for far too long, causing them to lose a lot of ground in the early days of a rebound.
Data suggest the 10 best days over the past 20 years occurred during the financial crisis of 2008-2009 and during the very first days of the Covid-19 pandemic in 2020.
The value of the S&P 500 has risen by 284 per cent in the past 20 years (excluding dividends), but without those best 10 days, it is only 76 per cent.
While it is not possible to only avoid the best days in the markets, what it implies is that by trying to predict the best time to buy and sell, one may miss the market’s most significant gains.
Watch: Dow breaks 14,164 record high
Instead of lump-sum financing, investors would be wise to invest in increments, also known as dollar-cost averaging.
Dollar-cost averaging can be an excellent strategy when it is difficult to call out a bottom in such markets.
It is an excellent strategy for investors who want to take advantage of the dip but fear a further sell-off. Whether it is once a week or once a month, investors can put in a little at a time to ensure they are still investing in a structured way, but taking the emotion out of it.
3. Diversification
It is essential not to look for a needle in a haystack but, instead, just buy the haystack.
For example, someone who invested their funds in Tesla would have lost 68 per cent last year, while if you invested in the Nasdaq 100 index, the loss would have been only 34 per cent.
Those losses would have dropped to 20 per cent if you bought into the S&P 500 index and even further to 14 per cent if you had a 60/40 equity-bond portfolio.
Therefore, it is advisable to maintain a broad diversification among asset classes and even sectors to mitigate the volatility.
It is advisable to maintain a broad diversification among asset classes and even sectors to mitigate the volatility
Vijay Valecha,
chief investment officer at Century Financial
Investors should diversify in a mix of cash and income-producing securities rather than solely in equities. The goal should be to achieve reasonable returns that outperform inflation while keeping volatility under control.
4. How to start
Decide on your goal – what do you need the funds for and when are they required?
This step is essential as it will help you to decide on the appropriate risk-return strategy.
However, before investing, you should reduce your debt and set aside an emergency fund so you are not forced to sell your fund when markets are down because you need cash.
And remember – start now and invest regularly.
However, it is important to note that investing involves risks and there is no guarantee of positive returns.
It requires careful consideration, an understanding of the investment vehicles and a long-term perspective.
Vijay Valecha is the chief investment officer at Century Financial
Killing of Qassem Suleimani
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test Thursday-Monday at Colombo
- 3rd Test August 12-16 at Pallekele
Killing of Qassem Suleimani
The years Ramadan fell in May
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
if you go
The flights
Direct flights from the UAE to the Nepalese capital, Kathmandu, are available with Air Arabia, (www.airarabia.com) Fly Dubai (www.flydubai.com) or Etihad (www.etihad.com) from Dh1,200 return including taxes. The trek described here started from Jomson, but there are many other start and end point variations depending on how you tailor your trek. To get to Jomson from Kathmandu you must first fly to the lake-side resort town of Pokhara with either Buddha Air (www.buddhaair.com) or Yeti Airlines (www.yetiairlines.com). Both charge around US$240 (Dh880) return. From Pokhara there are early morning flights to Jomson with Yeti Airlines or Simrik Airlines (www.simrikairlines.com) for around US$220 (Dh800) return.
The trek
Restricted area permits (US$500 per person) are required for trekking in the Upper Mustang area. The challenging Meso Kanto pass between Tilcho Lake and Jomson should not be attempted by those without a lot of mountain experience and a good support team. An excellent trekking company with good knowledge of Upper Mustang, the Annaurpuna Circuit and Tilcho Lake area and who can help organise a version of the trek described here is the Nepal-UK run Snow Cat Travel (www.snowcattravel.com). Prices vary widely depending on accommodation types and the level of assistance required.
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
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The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
Everton 1 Stoke City 0
Everton (Rooney 45 1')
Man of the Match Phil Jagielka (Everton)
UAE currency: the story behind the money in your pockets
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Green ambitions
- Trees: 1,500 to be planted, replacing 300 felled ones, with veteran oaks protected
- Lake: Brown's centrepiece to be cleaned of silt that makes it as shallow as 2.5cm
- Biodiversity: Bat cave to be added and habitats designed for kingfishers and little grebes
- Flood risk: Longer grass, deeper lake, restored ponds and absorbent paths all meant to siphon off water
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Killing of Qassem Suleimani
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Mubalada World Tennis Championship 2018 schedule
Thursday December 27
Men's quarter-finals
Kevin Anderson v Hyeon Chung 4pm
Dominic Thiem v Karen Khachanov 6pm
Women's exhibition
Serena Williams v Venus Williams 8pm
Friday December 28
5th place play-off 3pm
Men's semi-finals
Rafael Nadal v Anderson/Chung 5pm
Novak Djokovic v Thiem/Khachanov 7pm
Saturday December 29
3rd place play-off 5pm
Men's final 7pm
