Adam Khoo’s Golden Investment Principles

1.The Stock Market Index Always Goes Up in the Long Run. This long term trend is driven by inflation,
population growth, consumption growth, index re-balancing and productivity.

2.In the Short term, nobody can predict where the market will go. While we can make educated guesses,
markets can be completely irrational in the short-term. Be prepared for all eventualities.

3.Never act on the predictions and opinions of economists or market analysts.

4.Over the last 100 years, there have been 50 Corrections of More than 10%. These 10% corrections that
occur once every 2 years, are good buying opportunities.

5.Over the last 100 years, there have been 20 declines of more than 20%. These bear markets
(averaging -36% declines) that happen once every 5 years, are very good buying opportunities.

6.The stock market is not the economy. The stock market bottoms as economic recession begins. The
sock market reaches its top when the economy is in full recovery.

7.Only invest in stocks of fundamentally great companies with wide economic moats, consistent growth in
sales, earnings & operating cash flow, strong growth catalysts and strong balance sheets.

8.Only invest in stocks of businesses you truly understand. Invest in businesses whose products and
services you use yourself. Avoid stocks that are outside your circle of competence.
 Adam Khoo’s Golden Investment Principles

9.A great business may be a lousy investment if you pay too high a price for it. A great business can be
an excellent investment when you pay a low enough price for it.

10.Never give in to the Fear of Missing Out (FOMO) and buy hyped-up stocks that are overvalued or
technically overextended

11.Only invest with money you don’t need to use for at least 3-5 years. An investment reaps its greatest
rewards after its 3rd to 5th year.

12.Buy shares of great companies consistently, whenever they are undervalued and whenever they are at
technical support levels

13.We can never buy at the absolute bottom. As long as we get a price that is fundamentally
undervalued and technically supported, it is one of many buying opportunities.

14.Always maintain a portfolio of at least 10 to 30 high quality companies with fairly equally allocation to
each stock

15.The best investment you can make is usually in a great company whose stock you already own

16.Sell a stock the moment it fails to be a great business (loses its economic moat). Sell a stock if you
can deploy the proceeds into an even better investment