Mark Cuban's 'No. 1 rule of investing' when you don't know what to do about the market

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Mark Cuban's 'No. 1 rule of investing' when you don't know what to do about the market. (via CNBCMakeIt)

"If you don't fully understand the risks of an investment you are contemplating, it's OK to do nothing," Cuban said in a 2010In fact, making reactive moves as the market fluctuates is not a good way to invest, according to experts.

"Investing should never be about a moment in time," Liz Ann Sonders, chief investment strategist at Charles Schwab,It's advice that Warren Buffett often gives too. In fact, he is an advocate of the ""[D]on't watch the market closely," Buffett told CNBC's "On the Money" during 2016's market fluctuations. "The money is made in investments by investing and by owning good companies for long periods of time.

As for Cuban, the seasoned investor tells CNBC Make It that he sold all his stocks while the market was high recently, as a way to grow his liquidity . But even with stock prices down amid Monday's sell-off, he's sticking to his "when you don't know what to do, do nothing" rule. He says he hasn't bought any stocks yet because of his own uncertainty.

"[I] won't rush into [buying] anything 'til I look at a company and know that it's mis-priced or see something that seems out of whack."

 

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