Sir John Templeton’s Rule No. 15 -There’s no free lunch

This principle covers an endless list of cautions. Never invest on sentiment. The company that gave you your first job, built your first car, or sponsored a favorite old TV show may be a fine company — but that doesn’t automatically make its stock a fine investment. Even if the business is excellent, the stock price may be too high.

Never invest in an initial public offering (IPO) just to “save” the commission. The commission is already built into the price — which is one reason many new stocks decline after listing. This doesn’t mean you should never buy an IPO; just don’t buy it for the wrong reason.

Never invest solely based on a tip. It may sound obvious, but many well-educated and successful investors still fall for tips. A tip feels psychologically compelling — it creates an illusion of inside information or a shortcut to quick profits. But investing based on tips is one of the fastest ways to make costly mistakes.