The 5 Strategies Underpinning Warren Buffett’s Success in Financial Investments
Warren Buffett is often presented as one, if not THE, largest financial investor in the last 100 years. His career as an investor began at a very young age, when he started trading shares at the age of 11! At 16, he had already realized a capital gain of $6000. This is quite impressive when you reduce this amount to its current equivalent of over $50,000. Today, Warren Buffet is on the podium of the richest men in the world with a fortune spending $80 billion! He is in third place just behind a certain Bill Gates with whom he shares a great friendship.
Anyone seeking to become a better financial investor needs to take a closer look at Warren Buffett’s history, including his greatest strategies that have allowed him to be where he is today. In this article, I suggest you discover 5 basic strategies that have enabled Warren Buffett to achieve great success in financial investments.
1. There is no single miracle investment formula
According to Warren Buffet, there is no magic investment formula or rules that guarantee success. The only way to invest wisely is to do in-depth research on investment vehicles, understand their advantages and disadvantages, and finally evaluate your options based on your financial objectives.
2. Always have a long-term vision
Warren Buffet has always invested with a long-term vision in mind. Building up a solid estate does not take a few months or 4 or 5 years. On the contrary, it takes more than 10 years for an investment to absorb market volatility, beat inflation and finally generate stable returns.
If you’re wondering how to take things to the next level and make decisions with a long-term vision, there’s nothing better than applying the 10/10/10 method that billionaire investors like Warren Buffet or Ray Dalio apply daily.
3. Avoid losses
Warren Buffett often says he only has two rules:
“Rule number one, never lose money.
Rule number two, never forget rule number one.”
This means that you should not chase stocks or investment options that seem too good to be true and promise too high returns in the short term. If you do so anyway, not only will you end up losing money instead of making profits, but you will also have to start your investment from scratch.
That would be a pity and that is why we must remain pragmatic. By keeping your feet on the ground, you will be able to avoid losses.
4. Buy high values at low prices
Warren Buffett often repeats that one of the ways to avoid losing money is to make sure that the price at which you buy a share matches its value. Therefore, you should give priority to seeking investment opportunities that offer more value at a lower price.
One of the investment opportunities corresponding to this philosophy is the online loan of money. It is also known as Peer-to-Peer (P2P) Lending. This is a safe and simple option that will help investors achieve a desired rate of return with an option to minimize risk by choice.
5. Keep a cool head
One of the major investment laws says that you shouldn’t follow the herd and that you shouldn’t invest only where others invest. The most important thing is to trust your instincts. You have to work on your ability to analyze market sentiments and learn how to manage your money properly.
So avoid the feeling of FOMO (Fear Of Missing Out) which wins many investors who arrive after the battle and makes them lose a lot of money!
These 5 basic strategies have enabled Warren Buffett to achieve great success in financial investments and becoming one of the richest men in the world. The most impressive thing in its history is that it has managed to maintain this success for several decades.
By following its strategies, you will maximize your chances of long-term success in financial investments.