5 Greatest Investment Lessons by Buffett

Posted On Tuesday, Sep 01, 2020

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The Oracle of Omaha celebrated his 90th birthday on August 30th, 2020.

As an ode to this legendary investor, we share with you 5 of his best investment lessons ever.

Here goes the first lesson...

"Do not save what is left after spending, but spend what is left after saving"


Possibly your first step towards investing. Your first step towards generating wealth.

As simple as it may sound, this is by far where most savers go wrong.

We tend to plan our investment from whatever is left post our monthly expenses.

This quote means that you should always reserve your savings out of your earnings. And plan your expenses from only the balance that is left. Doable?

The next lesson...

"Our favourite holding period is forever."

Can we pause for a moment and applaud this quote first.

It teaches investors that equity investing is for one who has patience.

This quote is a mind-set of a disciplined investor.

No matter what happens in the short term...good investments in the long run has the potential to reap you good benefits.

Coming to the third lesson...

"Don't watch the market closely"

Make investing peaceful!

This is exactly what this quote denotes.

Think of your doctor's expression when they figure you have already read a lot about your symptoms on the "internet".

Too much information is always injurious to your mutual fund portfolio.

Investing ideally requires you to put your money in an investment avenue you trust and then review it time to time, may be every 6 months...

Ignore small market hiccups and look at the bigger picture.

Now to the fourth lesson...


"The light can at any time go from green to red without pausing at yellow"


The recent COVID -19 impact is by far the biggest example of market disruption.

Through this quote we need to learn to be prepared for the worse.

The harsh realities of the market volatility helps us realize the importance of dealing with this unexpected ups and downs more crucial than ever.

Please understand volatility of any sorts is the very nature of markets. Ideally, as an equity investor what you need to do is simply stay calm. Stay invested.

Impulse buying and selling can dampen your portfolio returns.

We recommend, you to consult your financial advisor instead of letting the fear grip you.

Finally, the fifth lesson...


"Be fearful when others are greedy and greedy when others are fearful"


Okay. You might wonder, now isn't this a clue to be impulsive?

The answer is a big NO.

This quote is what generally all value fund managers truly believe in.

We recommend you to also practice this golden rule of investment.

Make the most of the dips in the tide and add to your investment pool. While on the other hand when the markets are roaring high and everybody seems to jump in to the ride, just stay away.

Why?

You might rather shop during sale period than the launch phase. Right?

Same logic. When markets fall, stocks are available at attractive valuations. In the rising markets, sentiments could be super positive but adding to your investment during this time could mean buying at high value.

Remember the demand and supply strategy. It's applicable here as well.

So go ahead, try and imbibe these investing lessons for the wellbeing of your financial future.

It's a process.

We are learning. So should you.

In today's time when the world economy is on its path of recovery post crisis...it is inevitable to keep learning and build a secure future for yourself and your family.


Editor's Note: We also believe in the above investing lessons and ensure to follow that as a part of our investment process. To know more about, you can write to us at [email protected] Or give us a missed call at +91-22-68293807 and we will call you back. KYC Pending? Now complete your paperless E-KYC in a matter of few minutes. Click Here



Disclaimer, Statutory Details & Risk Factors:


The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors.

Above article is authored by Quantum.

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