Investors rarely agree on a common thing, except they all believe that one requires strategy to make money in the market. The very worst strategy is no strategy at all. One needs to make their own strategy that are built around a various set of rules. Here are some money mantras from world’s top investors that will help you get your investment strategy in place.
Different investors follow different rules to buy, hold and sell stocks, but INDUSTRY LEADERS provides you with the common money mantras that all investment gurus will agree upon.
Warren Buffett is considered as the most successful investor of all time. He is the owner of Berkshire Hathaway and is one of the richest men in the world. The world market moves on the basis of Mr. Buffet’s words. He is the financial guide of many world leaders and even the president.
His Strategy: It’s better to buy a wonderful stock at a fair price than to buy a fair stock at a wonderful price.
Warren Buffett believes in buying quality stocks when it is marked down. He considers two factors while investing, quality of the company and the price. Evaluate price only when you are sure with the quality of the company. Do not expect to buy quality companies at dirt-cheap prices. And don’t buy any company that is not of good quality just because the price is low. Many a times good companies have bad stocks, get the details if you find such company, and if it proves to be a quality company, buy it.
Buffett only invests in the company he deeply understands and this strategy has made him one of the world’s top investors.
Alwaleed Bin Talal
This name may be new to you, but it is well-known in the investing world. Alwaleed Bin Talal is an investor from Saudi Arabia and is a member of Saudi royal family. He is the founder and CEO of Kingdom Holding Company.
His Strategy: Hold stocks for a longer term.
During the recession, Alwaleed Bin Talal had 14.9% stake in Citigroup at a much higher price than before the recession. Additionally, he also lost a huge amount in his real estate investment in India. Instead of selling the stocks, he held it for a longer time, taking large market events out of the scenario and collecting the dividend when they wait.
According to him, it is fine to invest in stocks for a short or medium period, but a majority of your portfolio should be invested in the long term only.
Benjamin Graham was a great investor advisor of the 20th century. Graham is referred as the father of value investing. Value investing protects investors from substantial errors and helps them build long-term strategies. Graham is also known as the mentor of Warren Buffett.
His Strategy: Value investing.
Graham had a simple rule of not complicating things and keeping it really simple. He would buy stocks at cheaper rate and hold them until the price gets higher. No need of complex information or strategies. His checklist included things like:
- An earning-to-price yield minimum two times the AAA bond rate.
- P/E ratio < 40% of the highest P/E ratio over last 5 years.
- Total debt less than book value.
- Current ratio > 2
These tried and tested money mantras will surely help you manage your portfolio better.