Some investment advice that will add to your life from Warren Buffett, who is 91 and has been in a trade since 6 years old.
Do you remember Warren Buffet, who at the age of 6 was the richest person in the world with his success in money management, who bought 6 cokes from his grandfather’s shop and sold the bottles one by one and made a profit? We have compiled his recommendations to investors.
Warren Buffett was in a head-to-head fight with Microsoft’s founder Bill Gates between 2001 and 2007 in the race to become the richest person in the world. Eventually, Buffett took the crown from Gates in 2008, becoming the richest person in the world with a net worth of $62 billion. Since then, we have definitely seen Warren Buffett in the top five in the billionaires list prepared by Forbes every year.
Considered one of the most important investors of the 20th century, Warren Buffett is one of the most influential people in the world, according to a study by Time magazine in 2012. How old were you when you first made money? Warren Buffett first made money when he was six years old. He started selling the six-pack of cokes he bought from his grandfather’s grocery store at a profit of five cents per bottle. For example, “Thursday’s arrival is obvious from Wednesday,” Warren Buffett started to give signals about what kind of person he will be in the future at a very young age.
Warren Buffett 5 Investment Advice
Warren Buffet owes his wealth to his money management skills. So much so that when he was only six years old, he went to a grocery store run by his grandfather, bought a 6-pack of Coca-Cola, and made his first profit by selling the bottles to different people. Of course, these talents enable him to achieve academic success in the following years, and then he runs a long career to an investment firm called Berkshire Hathaway.
Rule 1: Never lose money – Rule 2: Remember rule number one
Due to the nature of the business, the aim is to try to make a profit while investing. But one of the best ways to do this is to try not to lose it. When you eliminate decisions that could harm your portfolio, profits are usually left. Of course, the more money you keep in your portfolio, the easier it is to increase your earnings. According to Warren Buffett, it’s better to avoid losses first and then look at gains, rather than trying to take the biggest advantage. Of course, this idea does not fit the logic of investors who see the stock market as a slot machine in casinos.
Do not consider risking the quality of the company you invest in
When Buffett first entered the investment business, he followed the path of selling the shares he bought cheaply when they went up. However, over time, he saw that it is more profitable to invest in quality companies that promise growth. He even has an important saying on this subject: “Time is the best friend of quality companies and the enemy of average companies.” High income in capital creates value and is a symptom of the ‘economic ditch’. The term “economic moat,” coined by Buffett, simply refers to a company’s profitability and differentiation compared to its competitors.) Buffett prefers to invest in companies with high and stable revenues, such as 10-20 percent of the capital invested.
When you buy stock, try to hold it for a long time
Let’s say you bought shares from a quality company at a reasonable price, how much should you keep? Buffett has a striking statement on this subject: “If you don’t plan to hold a stock for ten years, it’s better not to buy at all.” Warren Buffett is one of those investors who embrace the “buy-and-sell” mentality. Quality companies are likely to generate high revenue and increase in value over time. Also, constantly buying and selling stocks erodes revenue in the form of taxes and transaction commissions. Therefore, it makes more sense to buy stocks and wait.
The best moves are often boring moves
The way to get rich quick is not to invest in the stock market. It makes more sense to invest in proven companies rather than trying to find the future star of a new growing industry. After all, our goal is to find quality companies that will gain value over the years. If we can achieve this, our portfolio will be able to take care of itself. You don’t need to try to be a hero investor by identifying the emerging companies of the future. Remember that good results can be obtained from boring movements.
Best for most investors to invest in low cost index funds
Warren Buffett recommends low-cost index funds, especially for investors who are not concerned about earning a fixed amount of dividends. Another important piece of advice from the wise investor is to use the ‘average dollar cost’ strategy when investing. As the name suggests, the event takes the form of investing small amounts in a certain asset at regular intervals. So, according to Warren Buffett, it is more profitable to invest from time to time rather than all at once.