Motley Fool's Housel: Investing is a 'Game of Psychology'

Why did he feel the need to do that? "High returns breed complacency and create a false impression of how easy investing can be," he writes in The Wall Street Journal. Both the S&P 500 index and the Dow Jones Industrial Average hit record highs Friday.

Housel's truths include:

• "All past market crashes are viewed as opportunities, but all future market crashes are viewed as risks.
• "Investing is overwhelmingly a game of psychology.
• "Three of the most important variables to consider are the valuations of stocks when you buy them, the length of time you can stay invested, and the fees you pay to brokers and money managers.
• "It can be difficult to tell the difference between luck and skill in investing.
• "You are only diversified if some of your investments are performing worse than others."

Meanwhile, Christine Benz, director of personal finance for Morningstar, recently put together a different sort of list, following up on Warren Buffett's aphorism that his preferred holding period for an investment is forever.

"Having a long holding period helps limit trading, and that reduces the transaction and tax costs that can drag on your portfolio's take-home total return," she notes on Morningstar.com.

Benz cited several candidates, including Google; Dodge & Cox Balanced, an actively-managed mutual fund; and Vanguard Total Stock Market, an index fund.

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