Warren Buffett encourages investors to invest in stocks for the long term. In other words, buy and hold, receiving dividends, as well as hoping that stocks will increase in value over time.
Below I will provide some advice from the Investment Guru.
- Set out your action plan in writing or keep it in mind. The main thing is to stick to it as strictly as possible in practice.
- Show sufficient flexibility: if any circumstances or new information significantly change the situation, make changes to your action plan.
- Examine the dynamics of sales and company profits. Analyze the sources of their receipt.
- Focus on a potential investment. Carefully analyze the line of products or services provided by the company, its position in the industry as a whole and in comparison with its closest competitors.
- Gather as much information as possible about the people who manage the company.
- If you find a great object for investment, do not pay attention to unfavorable forecasts of the dynamics of the market and the economy as a whole.
- Do not invest only to invest money. If there are no suitable facilities, save your capital in cash. Many too emotional investors, not finding the optimal object for investing, get the best of what is available. And then they regret it very much.
- Determine for yourself what you understand and what not. Invest in those companies whose business you know.