Warren Buffett is a role model for most of the investors or beginners of investments. Most of the people try to find his investment strategies or tips to be success. But most of the beginners want to get immediate capital gains on their investment.
This is totally different strategy of Warren Buffett.
What I learn from Warren Buffett.
Invest for Long term
Warren Buffett is always prefers to invest and hold for long term than the short term profits. Specially when his investments are reaching a higher gains in short terms even, he hold those stocks rather than to exit those and enjoy profits.
He believe the market is the friend of him, as he often says if your treat your friend nicely he will treat you nicely.
Don’t worry about short term Fluctuations
Don’t worry about the short term market fluctuations, every business have an up and down with seasons, so don’t go with the seasonal fluctuations and confused with your investments. Better wait for long time, and see fluctuations and take decisions on it.
Buy good business not stock
Warren Buffett prefers to buy business rather than stock. He mainly focuses on the business management and companies’ financial health. Before he invests, he mostly consider about the business rather than the stock fluctuations.
He practices to buy the stock at the lower or reasonable price.
Buy the business the industry you can understand
This is Warren Buffett common understanding, such to invest the known business and the known business growth for long term. By knowing the company background and financial futures only help the investors to make sure the investment to be valid.
Warren Buffett ignore to buy Technology Company because, he couldn’t understand the long term business perspective of technology.
Better not to be an active trader
Warren Buffett always prefers to not to be an active trader, the active trader is only focuses on the short term investment rather than the long term capital gains.
And active trading is a costly approach and high brokerage payments. Rather than be more active trader and spend lots of money on it, better to be inactive trader and focus long term.
Don’t over diversify
Warren Buffett advises to have small number of diversification in investment. Better to have a range between 5 to10.
Better the short list of diversification is good to be having focus on it. By evaluating the correct business and invest of long term, needs not to be disturbing the focus.
Market is your friend
Warren Buffett often says market is your friend, so better to deal with the friend nicely and not disturbed too much. While we understand the market and focus long term, the friend with you for long term and make your portfolio to grow.