The 90/10 Rule Of Investment

The 90/10 rule shows up in a variety of ways in all fields of life.

In money management and investment the 90/10 rule says that—over long periods of time (think your lifetime or 100 years) you will come out on top 90% of the time by following conventional wisdom, known also as the wisdom of the crowd. It follows that in the other 10% of the times you are better off going with the contrarians and against the crowd. The 90% represent periods when the trend is your friend. In the other 10% of the time, markets go through inflection points of trend reversals. Recent months represent just such an inflection point of trend reversal where the contrarian position is wiser and safer than the crowd.

Study your options. Explore a range of ideas and strategies. Make decisions that fit your situation. Position yourself with the 90/10 rule in mind.

© Aviv Shahar

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