Warren Buffet’s Investment Ideas: American billionaire Warren Buffett’s name comes at the top of the list of world’s most famous and most successful investors. The success of Warren Buffett, who maintains a consistent place among the world’s richest people on the basis of investment in the stock market, is his highly settled investment strategy. So let us know 5 important things of this great strategy:
1. Put money in the place that you are fully aware of
You should invest your money only on the basis of your understanding. It is possible that such investment plans are presented in front of you, in which you are promising huge profits. But be careful. If you do not understand properly how the money is going to grow in that investment, then it is better to stay away from it. Lest you lose your lot in one stroke. You should make your investment decisions only by relying on your knowledge and understanding.
2. Invest by looking at the quality of the business
Everyone hesitates while investing in a new company. The question that arises in our mind is, how right is it to invest money in a company that has recently started or is in the process of moving forward? On the other hand we are attracted towards investing in high profile companies. We see the hope of a great return in them.
But it is also necessary to think about this in a different way. If you feel that a company is making products of very good quality or providing excellent service to its customers, then you can consider investing in it. The share price of such a new company can increase very rapidly over time. While there may not be that much of a bounce in the shares of a previously established and high profile company. Warren Buffett believes that “it is better to buy the shares of a good company at a great price, than to buy the shares of a good company at a reasonable price.”
3. Invest for the long term
After buying the stock, it is better to sell the stocks of good companies and then keep your investment in them for a longer period of time than selling it in a single day or in a very short time. The value of a good business increases over time and at the same time its share price. So after investing in good companies, be patient for better returns. Long term investment in the stock market ultimately gives more profits, provided you choose the right companies.
4. Remember the difference between the market price and the value of the stock
Always remember that the current market price of the stock and its actual value are two different things. The share price in the market varies every moment. Many times there is no mismatch between the price of a share and its true value. Instead of the share price that shines on the market screen every second, you should look at the value of your investment. Many investors are extremely successful even in the recession in the market, while many investors come in a hurry and sell their good investments by taking a loss. But at such a time, if you look at the correct value of your stock instead of the current price, then you will be able to make better decisions about investing.
5. Making money from the stock market is not a lottery game
Buying money in the stock market is not like buying a lottery ticket and becoming rich overnight. To become a successful investor one has to work hard and carefully in choosing good companies. Creating a good investment portfolio for yourself is a long process, which requires a lot of patience. The greed to earn profits as soon as possible can lead to wrong investment, which can ultimately prove to be harmful for you. For better returns, you should invest in companies whose business model as well as management is also good. It is better to stay away from companies that try to woo people only through advertisements and hollow tricks.