9 Best Investment Tips from Famous Investors
If you are an investor (whether a seasoned or a beginner), you may have always aspired to follow the footsteps of the richest and most successful investors of the present era. You might be amazed by their knack for studying market conditions, spotting opportunities, analyzing top companies, crunching the numbers, and choosing the winning stocks.
Investing, however, is an art and a science and great investors are the ones who have mastered the application of financial models and quantitative research and developed fine intuition, judgment, and years of experience in the domain. Advice from successful investors can help you make good investment decisions.
In this blog post, we have listed nine best investment tips from legendary investors.
1. Evaluate your investment needs and goals
“I do know that when I am 60, I should be attempting to achieve different personal goals than those which had priority at age 20.” — Warren Buffet
Once you have decided to invest your money into a business, invest your time to think about what you want to get from the investment. While determining your needs and goals, you will need to consider the following:
· Age
· Financial position
· Income
· Personal circumstances
· Capital appreciation
2. Invest early
“It is best to start investing earlier in small increments rather than invest big increments at a later time.” — Aya Laraya
The sooner you start investing, the less money you will need each year to attain your investment goals as your earnings will compound over time. Investments over the long term tend to beat inflation and help you reach your financial goal.
3. Learn all about investing
“You can learn about investing by reading books.” — Bill Ackman
To be able to make sound investment decisions, you will have to understand the business you are looking to invest in and learn the basic terminology in investing. You can do so using many sources available.
4. Look at your spending habits
“It’s not your salary that makes you rich; it’s your spending habits.” — Charles A. Jaffe
Also an unknown saying goes, “wealthy people invest first and spend what’s left. Broke people spend first and invest what’s left.”
To get started with investing, you don’t always need a lot of money. But make sure that you have enough money at your disposal to pay the rent, EMIs, bills, mortgage payments, etc.
5. “Diversify your investments” — John Templeton
“Don’t put all eggs in one basket.” — Warren Buffett
In a fluctuating market, the value of stocks and shares move up and down all the time. Diversifying your investment allows you to balance risk and reduce the volatility in your investment portfolio over time.
6. Be patient
“The stock market is a device for transferring money from the impatient to the patient.” — Warren Buffett.
Patience is the most important factor in a successful investment. In a fluctuating market, the value of investments does go up and down in the short run. But you must be patient and remain invested for the long-term.
7. Understand the business
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch
“Never invest in a business you can’t understand.” — Warren Buffett
Before selecting a company to invest, find out its business model, and understand what it does to make money.
8. Learn to be an investor, not a speculator
“The individual investor should act consistently as an investor and not as a speculator.” — Benjamin Graham
Avoid certain high-risk investments, however lucrative they may seem, unless you understand the risks associated with them and have sufficient financial cushion. As Peter Lynch famously said, “A share is not a lottery ticket. It’s part-ownership of a business.”
Suggestion is made to have a look at Best Low-Risk Investments during 2020.
9. Consider traditional investment options
“Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.” ― Robert T. Kiyosaki
Traditional investment options (including real estate, gold, private equity, venture capital, hedge funds, etc.) are lucrative and offer a high return on investment. Also investing in traditional sectors such as agriculture, finance, media, medical, and technology also offers immense growth potential.