The universe is rife with awful advice on finances. Everyone from your slimy brother in law who cannot seem
to hold down a job, but always has a hot stock tip to your neighbour's dippy daughter who barely eked out her communications degree before landing a sales job with the local financial services branch is up for telling you
what to do with your money.

And what most of them telling you are incorrect. 

I have read numerous articles from financial experts jump out of the objective and into the opinion fray, 
they come away looking like asses. Worse in this instance is that people could lose their homes from following 
such bad advice. 

I only wish he'd put as big as emphasis on math as he does on psychology. 

Unfortunately, there's a lot of similar quality advice in the financial world. The only means to protect yourself from taking on the bad habit after bad habit is to learn how to separate good, logical financial advice from uninformed opinion.

There is no universal rule to apply here, but you can certainly catch 80% to 90% of the bad with one simple axiom; 

DO THE MATH!  Any financial decision is best produced by running the numbers on both sides of the coin. 

What happens in the best case, and what happens in the worst. Find out what the outcomes are for yourself and use them to judge. 

There are no shortcuts when it comes to money. Advice either adds up or it doesn't. Never trust a blogger, journalist, pundit and analyst who doesn't practice the same. Anyone above who fails to attend at the risks and reward in pure dollars and cents is clouding the issue with unnecessary fluff, and probably trying to obscure the facts that contradict his case.

That said, be wary of false mathematical prophets as well. If someone paints and overly rosy picture, constantly check the inverse too.

The same principle applies to our investment portfolio, whether it is value term , growth term or speculative type, 
the idea of every investor can both beat the market and reduce risk by concentrating on a handful of high potential investments instead of spray and pray approach that some financial experts take.

Over the last 100 years, on or at least half a dozen occasions you would have lost 20% or more in a year. And we all know, that's how it's been in recent times, with losing years in 1986/88, 1997, 2000, 2001, 2002 and 2008. Unfortunately, losses compound faster than the gains. If the market goes down 25% in one year and recovered 25% the next, you don't break even,  you still down 6.25%.

Rational Investing couple with the 20% speculative approach in the stock market is never easy. It takes a keen eye for opportunity or a guide you trust.

It takes the ability to see the forest for the trees and understand big volatility in a small part of your portfolio is much less risky than putting everything on the line and crossing your fingers that another 2008 isn't just around the corner. It can be remarkably freeing psychologically when you know more of your money is safe.

Choose a few sectors, in which.....where you believe you can find the kinds of returns to balance the risk you're willing to take. 

Investors or traders, we should start by assessing our own risk tolerance. How much you can afford to lose and come back to fight another day. 

Life is short, have fun!

P/s; To make money investing, you must find an information advantage you can exploit. It can come in any of a number or forms.