I have always been a big fan of Warren Buffett. Mainly because he can put investing strategies in simple and understandable form and his personal investing strategy is quite similar what I am looking after. Today I want to share some his tips and how I use those in my daily life.
- Index Funds
This is to best way to investing for somebody who does not follow stocks daily or just want to invest with a low risk. I thinking also add some small cap indexes to my portfolio, but for now I haven’t. because there are some disadvantages what comes to tax planning (at least in Finland).
One of my favorite quote from Warren is: “Someone’s sitting in the shade today because someone planted a tree a long time ago”. Everybody should understand that there is no “quick money” what comes to stocks. The investing strategy should be close to hibernation.
- Hold the stock
Only buy stocks which you can own for lifetime. The company needs to be dealing in business sector which is still alive in 30 years. Also, I have one personal rule here, only buy business which have several products. There is a change that the company is one hit wonder…
- Invest in yourself
This was something I didn’t do let’s say five years ago, I just was happy in a situation what I was having. But for some reason I interested in investing and start to invest to myself as well. But this time I didn’t bought more gadgets but I bought books, started to watch educational videos and really started to think differently.
- Trust yourself
In the early phase, I checked the value of stocks hourly and my heart beat increased when I saw red figures. But nowadays I know that 48% of time I see red figures and this is part of the game. Just stay cool and trust yourself!
Hopefully these comments and ideas helps you understand a little bit better the game of investing and how the comments from Warren have helped me to get confidence when dealing with stocks. Also, it would be good if you find somebody who share the same ideology, because when you talk about these topics with somebody you will learn a lot of faster.