1. Ignoring the market noise is as important as hearing what the market is saying: A lot of traders and investors miss the trees for the forest and get caught up in news flows (from companies, the media and other market participants) that are nothing more than regurgitated hype. When buying shares in a company often the single most important variable is in fact the company. Give priorities to your time and spend most of it on what is important, part of that allocation of scare resources (i.e. time!) is the ability to ignore noise and focus on fact.

2. View yourself as an asset manager and regard your house, car, job, pension, unit trusts, equity holdings and so on all as part of one large, holistic portfolio: Most people's single biggest asset is the house they live in, which implies that they are highly exposed to the property market. Would it make sense for them to them go out and buy listed property stocks? Not really, but a lot of people do. Also, for example, if you work in the mining industry it means that your salary and bonus is coming from this sector. Perhaps consider not buy any mining stocks (or at least having an under-weight position in the sector)? The logic behind this is because if the mining sector goes through a bad patch, then your salary and bonus are at risk (in fact, perhaps even your job!). If you also then have mining stocks as a major part of your equity portfolio, they are likely to be performing poorly during this period, thus this is a double whammy. Hence, if you're in mining, skimp on mining stocks. If you're in financial services, skimp on financial stocks. If you're in manufacturing, skimp on industrials. Etc. Etc. And so I get back to my point that you should view yourself as one large, holistic portfolio and apply logical portfolio management techniques to it.

3. Paying off debt creates risk-free returns, in the absence any better risk-adjusted yield: Paying off debt saves you the interest cost of carrying it forward. This is a risk-free saving, hence a risk-free return. If you cannot find any investments (that all, implicitly, have an element of risk attached) with more promising risk-adjusted yields, then rather pay off your debt as a risk-free way of generating returns.

4. Cash is a position too: Following on from #2 and #3, if you have no debt and see down-side risk, then moving into cash is a position too. Cash provides you optionality that you can leverage later on. This is only from a holistic portfolio perspective. What I don't believe, though, is that traditional asset managers should sit heavily in cash. If I want to sit in cash, I will simply not invest. When I invest (for example, buying a unit trust), I want my cash invested into whatever the mandate of that fund is, as that is actually the asset I have bought. If the asset manager just takes my cash, does not actively invest it in anything other than his fund's bank account and then charges me for the "privilege" of doing nothing with my money... Well, I'm sure you can see the problem with that.

5. If nothing has changed, then everything is the same: Sounds rather obvious? Well, it is. Say for example I do all my homework on a company, I find that like the company and I decide to buy the share. Say then that the market wobbles, Eurozone politics escalates, oil price spikes, newspapers everywhere go crazy and the share price falls. Well, if everything that I found I liked in the company is still there, then I should move to #1 above and ignore the noise. When the shares in a good company fall, they just become cheaper shares in the same good company. If nothing changed, then everything is the same.

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