All of you must have heard of Warren Buffett. He is the richest man in the world. He is rich not on account of hoarding his ancestral property, but on account of following business ideas and investment schemes, with the utmost sense of precision and perfection. He buys when the world sells and he sells while the world buys.
Here is letting you know the top 10 wise investment ideas, to bring more wealth to your existing funds from the investment veteran, Warren Buffett.
Invest your money in a plan you are familiar with
You need to base your investment decisions purely trusting your intuition. There might be a couple of investment plans which can promise you everything under the sun. But beware, these investment ideas can be too overly complex for you to handle. Net result is you end up losing everything in a jiffy. Make your investment plans depending on the depth of knowledge you have, pertaining to the know-how of the same.
Invest your money in a quality business
All of you might slightly be skeptical on investing your money in a company that has just evolved or is in a developing mode. On the other hand, you may be tempted to invest your money in stocks of high profile industries which promise fabulous returns.
There is a slight twist to this thought. You can invest your money in the company if you feel the company is into churning quality products and giving the right kind of services to customers. Over a point of time, the newly emerged company can appreciate its stock value by leaps and bounds while the share of a developed company tends to remain constant. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett.
Hold on to your stocks for a longer duration of time
Buying and selling of shares the very same day can sometimes erode your capital money in no time. You can buy stocks of higher value and hold on to the same. The share value appreciates over a point of time. Buy shares from reasonably good companies and sit back relaxed.
You can accrue your dividends and earn better returns on your investment over longevity of time. Share market investment can be profitable if you plan your moves wisely.
Diversify your investments
Investors can actually absorb most of the fabulous advantages of diversification only if they invest in stocks of different companies. Even if the stock of one company goes down on account of an economic pull-over, the profitable companies can earn you rich dividends and enhance the returns of your investment.
Do not trust the updates put up in the form of financial news
You can read the headlines of your Economic news paper, every single day but you can simply brush aside the content of the same. 80% of the outcomes are attributed to 20% of causes responsible for the same. Your stock values can appreciate over paucity of time. Any move based on triggered instincts can be detrimental to your capital investment.
Consistency is the key
You need to consistently be focused with your investment plans. Investing money is not rocket science either. All one needs to do is to work hard and stay patient. When your shares accrue really well in the market, you can opt selling your shares. Nonetheless, do not go for a marginal gain, just to get rid of your existing shares.
Investing money in a wise manner is not rocket science. But at the same time, you need perseverance and patience to see your invested funds yielding rich dividends.
Learn the difference between the price of the share and the value it carries
Share prices keep popping every second. To determine the value of a company based on the price it carries, sometimes has absolutely no relevance with the value of your investment. During crisis situations, quite a lot of investors have emerged successful and have taken the boom even during the peak of recessions. On the other hand, it is a knee-jerk reaction for most of the investors and companies to sell off their shares and investment portfolios even if it turns out to be a distress sale.
The underlying fact here is the stock values popping up on the dashboard have no relevance with the value of your investment. You need to thus understand the difference between the current price of the share and the value it actually carries.
Look for companies that have already proved their mettle
Investing your money in shares is not a quick-fix route to get rich quickly. As an investor, you need to look for companies that have proved their mettle over years. Emerging winners from unproven enterprises can also vanish in no point of time. Hence, accruing dividends and letting your investment grow is a slow and steady process. Earning substantial returns over your investment is not like winning a lottery ticket.
Low cost index funds are a sensible form of investment
Investing your money on very low value index say like the S&P 500 index fund can let you reap fabulous dividends in the long run. Investing on Governmental bonds or post-office savings is far more practical and sensible as you are simply assured of getting your money back. Investing on equities or mutual funds which promise better returns can also involve you taking too many risks.
Invest your money into safe hands
Look for companies that follow sound principles of management when it comes to safe-guarding investors’ money. Very few companies live up to their ethics and share dividends to their investors in a fair and just manner. A lot of companies just involve themselves in false advertising gimmicks and other fraudulent claims to lure more subscribers. You need to look for a company which cares for you as an individual and not your money.
These are Warren Buffett’s top 10 investment ideas. Share market investment after all needs not to be as volatile as it is projected to be.