The Two Golden Rules of Sensible Investing

The guru of Stock Investing; Benjamin Graham said "In the short term the stock market behaves like a voting machine and in the long term like a weighing machine".

This is a precise insight about how the stock market works. While stock prices in the short term are affected by sentiments and availability of money, in the long run they reflect the true worth of the business behind it. Thus while there may be some short term deviations, the stock price of a strong business, capable of generating increasing profits year on year, will steadily increase year on year.

Based on this profound wisdom, you need to fully understand the Two Golden Rules of Sensible Stock Investing; a way of investing that ensures high returns without exposing you to high risk.