When people think of brilliant investors, most people think of Warren Buffett today. With shrewd investments and entire companies, he grew Berkshire Hathaway by nearly 20 percent every year. In addition, he’s fond of helping other investors and providing some interesting tips for people to consider. Since he knows more than a few things about investment opportunities, it’s clear that his judgment may just be better than everyone else or he’s extremely lucky. In any case, here are some little nuggets to take away from Buffet’s investor mind.
1. Optimism is Key
Long-term investments in the U.S. economy require optimistic attitudes. People must have patience and believe in the market for it to work. Buffett once went through the history of our economy and talked of many wars, recessions, oil shocks, sickness and the resignation of Richard Nixon to demonstrate that much of what is happening now has happened in the past. With a positive perspective, you can make it through up and down trends while maintaining your investments.
2. Brilliance Doesn’t Matter
Buffett doesn’t think that genius has any sway over success on Wall Street. Investing is simple, and by picking good stocks and investing in good companies, you can expect to see a greater return. Buffett stated that you should purchase stocks at a reasonable price in a business that is easy to understand. In addition, their earnings should show growth every 5, 10 and 20 years. There are only a few companies that can fit this model according to Buffett.
3. A Patient Investment is Wise
Buffett states that even people who live in remote areas of the country and only receive mail every three weeks could do well with investing. Investors have to maintain a long-term view of their investments. It can be many years before an investment actually starts giving back. However it’s very important not to get emotional and greedy. You never want to buy at inflated prices or sell after a big market drop. It only creates more problems.
4. Don’t Listen to Brokers
If you ask a hair stylist whether you need a haircut, you’re likely to hear that your do needs an update. Brokers are looking out for themselves. You should be careful not to get advice from people with a conflict of interest according to Buffett. There are also a variety of eBooks and sites online that don’t provide the most sound advice.
You can read Buffett’s annual letters to shareholders to learn more and make the best changes for your success.