5 Effective Investment lessons by Top Investors
Value investing is a smart way to invest in stocks, it’s like buying something for less than its actual worth. This move protects your hard earned money from losing its value, even if the company isn’t doing as well as you expected it to perform, overtime, it leads to big profits because then money starts growing faster, this strategy focuses on investing in companies that are strong and have a good future.
Our top investors, time and again, from generations, have taught us the importance of investing and along with that some lessons that can help us from entering the market blindly to reduce the chances of major losses and to not treat it like a gambling game to in turn lose everything just because of impulsiveness.
Patience is the most important virtue, that everyone is well aware of, but are you patient enough to know some of the greatest lessons by the most important investment gurus Like sebi registered equity advisor.
Lesson 1: Risk comes from not known what you are doing — BY Warren Buffet
A majority of investors start trading in stocks without having a proper knowledge. of hoe these asset classes really work. Warren Buffet has time and again advised investors to avoid chasing everything that shines and focus on what they are able to understand.
Running after every trending business might lead to bigger losses and in turn lack of confidence in one’s knowledge and understanding. Buffet himself used this strategy where he stayed away from tech stocks and it was in 2016 when he truly understood the business and bought a stake in Apple,
Lesson 2: The earlier you start off on equities the better- BY Benjamin Graham
The sooner you start investing in equities the more time you have to earn returns. And the more time you have then more returns are earned by your returns.
This tactic is called the power of compounding, and that works perfectly in case of equities.
Lesson 3: Develop your judgement- Radhakishan Damani
Its might not be a very good trait to judge other people, but its most certainly acceptable to judge stocks. Equity investing is all about judging the market and developing a perspective. If you are unable to have an opinion of your own, then you can’t climb the ladder. Damani is good at judging the behavior of the stock prices and is a patient listener. He attends to the advice of everyone but acts according to his judgment and instinct of course the knowledge he has gained through years of experience in stock market
Lesson4: Adopt the theory of reflexivity- By George sorro
According to this theory, Investors’ perceptions of what is happening in the markets influence their actions, which in turn influences their perceptions
So basically George Sorro believes that market prices aren’t just based on facts and figures. People’s opinion and guesses about what will happen can also make prices go up and down, when prices change, it can affect people’s thoughts, and then those thoughts can make prices change again. This can cause markets too much or too little, showing that they might not always be perfect
Lesson 5: Be best friends with TIME
‘Compounding is a miracle. So, even the modest investments made in one’s early 20’s are likely to grow into staggering amounts over the course of an investment lifetime”- John Bogle
Bogle always advised investors to start investing as early as possible to become successful at investing. He was of the view that if you start early then u are allowing your returns to compound over time and your money can grow exponentially all by itself.
He has advised on trying to time the market and instead focus on long term investment, Bogle emphasized that spending time in the market is crucial for achieving investment success.
