Bloomberg.com: Opinion

Bloomberg.com: Opinion: "Anthony cites three durable rules that remain relevant in the face of a global financial crisis: “You will do well if you spend less than your income, save as much as you can and don’t do anything stupid.”

Market Myths

In recent years, those truisms were eclipsed by market myths -- that home values would continue rising far faster than income growth and inflation, that the stock, bond and mortgage markets were becoming less risky even in the face of massive speculation, hedge-fund trading and derivative activity.

Many bought these myths lock, stock and barrel, ignoring their need for financial security in the process.

My best source for financial sanity comes from Polonius in Shakespeare’s Hamlet: “to thine own self be true.” Translated into a mantra for fiscal sanity that becomes: “Listen to your inner grandmother.”

If investment returns sound unrealistic, avoid them. If you don’t understand what you’re buying or can’t afford losses, the decision should be easy. Lower your debt burden. Refinance your mortgage if you can."