Have You Taken Your Investment Oath?

After years of a Wall Street-induced financial crisis, MBAs globally – especially the ones that might wind up working in the finance industry – are under a microscope. Before they get to Wall Street, though, some new business school graduates are signing onto a new professional code of conduct called the MBA Oath.

This MBA Oath is similar to the Hippocratic Oath that doctors take – which is, first, do no harm.

So, dear readers, if the MBAs and doctors or the world can take their oaths to ‘do no harm’ (to others), what stops you – as an investor – to take an oath to do not harm (to yourself)?

In fact, it’s good you take an investment oath now and promise yourself to become a better and smarter investor, come what may.

Here is an investment oath that was first published in Ben Graham’s The Intelligent Investor. I have modified it to suit an Indian investor’s requirements.

Print it, fill it, stick it in front of your work desk, read it, and practice it every day.

Believe me, this can have amazing consequences for your investment returns over the long run.

(You can download this word file to fill and print the following Investment Oath.)

I, _____________ ___________________, hereby state that I am an investor who is seeking to accumulate wealth for many years into the future. I know that there will be many times when I will be tempted to invest in stocks because they have gone (or “are going”) up in price, and other times when I will be tempted to sell my stocks because they have gone (or “are going”) down.

I hereby declare my refusal to let a herd of strangers make my financial decisions for me. I further make a solemn commitment never to invest because the stock market has gone up, and never to sell because it has gone down.

I will invest with discipline – month after month – and into businesses that I understand and stocks that I find are trading with a good margin of safety as compared to their intrinsic values.

I hereby declare that I will hold each of these investments continually through at least the following date (which must be a minimum of 10 years after the date of this contact): _________________ _____, 20__.

The only exceptions allowed under the terms of this contract are a sudden, pressing need for cash, like a health-care emergency or the loss of my job, or a planned expenditure like a housing down payment or my children’s education bill.

I am, by signing below, stating my intention not only to abide by the terms of this contract, but to re-read this document whenever I am tempted to sell any of my investments.

This contract is valid only when signed by at least one witness, and must be kept in a safe place that is easily accessible for future reference.

Signed: ________________________

Date: __________

Witnesses:

1. ______________________

2. ______________________