5 Tips From Warren Buffett investors should take to heart - Raiz Invest

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Whether you have been in the
investing world long or not, it is very likely you’ve heard of Warren Buffet. A
top dog in finance of all sorts, he is one of the five most wealthiest people
in the world.

Often referred to as the world’s
greatest investor, his long-term track record suggests that title is well
deserved! Investors and the business world alike have been seeking his advice
for decades, so here we have picked our favourite moments of his wisdom:

 

“Try to be fearful when others are greedy and
greedy only when others are fearful.”

Probably the most famous
Buffett-ism, this quote is essentially another way of phrasing the popular
investing maxim, “Buy low; sell high.” Investors frequently do the opposite
because of herd mentality; our psychological desire to follow the crowd.
But being a contrarian can be much savvier. For example, when current events
scare investors away from a down market, you might use that opportunity to buy
quality stocks on sale.

 

“Both large and small investors should stick with low-cost
index funds.”

Buffett may be a brilliant stock
picker, but he still recognises the strength of simple investing with a
low-cost S&P 500 index fund.

In 2007, Buffett bet a New York
hedge fund $1 million that his simple, low-cost investing strategy would
outperform the hedge fund industry over 10 years. And he won.

 

“The investor of today does not profit from
yesterday’s growth.”

This oldie but goodie reminds us
that past performance is no guarantee of future results, so you can’t count on
a hot investment continuing its streak. Instead, look to the future. Be sure
any investment you’re interested in has good prospects and can help you reach
your goals.

 

“Our favorite holding period is forever.”

Of course, Buffett doesn’t really
expect anyone to hold onto an investment forever. His point is that you should
“buy into a company because you want to own it, not because you want the stock
to go up,” as he put it to Forbes magazine in 1974. That means if
you’re trying to invest in individual stocks, you look for good businesses
you believe can be profitable for the long haul. Then you’ll only sell when you
need the cash, not because it’s time to unload a dud.

 

“Anything can happen anytime in markets… Market
forecasters will fill your ear but will never fill your wallet.”

Listen to Warren: Ignore the
noise—especially given today’s media landscape, where we have constant access
to information, and every minor event stands a chance at making headlines and
moving the market (at least in the short term).

In the end, as long are you’re
confident in your plan and portfolio, this shouldn’t change your long-term
investing strategy! Like the Raiz philosophy to invest small amounts regularly,
even in falling markets, this can help you to ride out the downturns in the market
and is one of the keys to having a healthier balance over the long run.

 


 

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Important Information

The information on this website is general advice only. This means it does not take into account any person’s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the product.

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The information may be based on assumptions or market conditions which change without notice. This could impact the accuracy of the information.

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super.

Past return performance of the Raiz products should not be relied on for making a decision to invest in a Raiz product and is not a good predictor of future performance.


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