If an investor had splurged $10000 in Buffett’s Berkshire Hathaway in 1965, today, they would have enjoyed a return of beyond $280 million. That’s really a gargantuan amount to receive on a basic investment. After hearing this news, any investor would get that adrenaline rush to know Warren Buffett’s investing secrets. So, below we have shared five of Warren Buffett’s fundamentals to keep in mind before investing.
1) Know your niche and market: As an investor, it’s your job to know what you are getting into before your hands get dirty. If you are planning to invest in the stock market, know how it works, and study a bit about it instead of chasing the impossible. You don’t need to know everything that’s in the deep ocean. If you know what you are dealing with, that would suffice to crack any deal.
2) Wake up the owner in you: Don’t buy stocks or invest in any avenues just like you purchase groceries at a supermarket. Buy as if you own it. People take good care of things when they buy with their money. So, this goes the same with investment. You should have a thought process of an owner. If you are buying a stock/s of a company, you are partly owing the company as well. The point Warren Buffett tried to make here’s that one shouldn’t get stuck with a thought of why a certain company is plummeting. Instead, find the logic and get an understanding of where the company is making good money. This will help you in the long term and aid you in becoming a prospective investor.
3) Focus on the productive avenues: This is good advice given by Buffett to young and rookie investors. You can’t expect a single investment to make you rich. Investors should explore the available investment options and invest in productive ones. Betting on only one stock will put your investment journey in jeopardy. If you are checking the company’s financial blueprint, and you find it a feasible investment, then there’s no looking backwards.
4) Timing is the key: The only way to win over volatile markets is to be abreast with the happenings in the financial space. You can’t splurge your money sumptuously buying every avenue you find viable for your portfolio. Buffett’s theory says that you should sit on your funds when the value of the money is hitting rock bottom, and vice-versa.
5) Get your hands on every opportunity: According to Buffett, seize every good opportunity that comes your way. You can’t simply invest and sit thinking that one fine day it will make you rich and successful. You can stay within your boundaries and comfort and still win big. Concentrate on the fundamentals rather than blindly following the troop. If the investor knows what he or she is dealing with, there are immense opportunities to seize on the way.