Speaking of how to invest your money, there are hundreds of thousands of different theories and strategies one can follow. It wouldn’t be wrong of us to tell that every single man on this planet will think he knows best where he should invest his money into.
It’s no secret that there is no formula that will make us rich overnight and that there is an ultimate recipe for investing that will prove to work in any economic circumstance and within any market. There are simply too many factors we must account for when deciding on which strategy we’ll adopt in one particular moment.
However, we can’t just turn our heads from the people who successfully made their wealth out of investing in stocks, bonds, and other financial instruments. Considering and listening to what they have to say about investing might help us find out the best way for making our pockets a bit deeper than they currently are.
Know How and When to Act on an Information
In the world of investing, information is a very valuable commodity. Investors usually invest their money because they believe a particular stock will move up or down in value based on some (usually publicly available) information about the company.
However, some people prefer to sit on their money and restrain from going in big even when they have pertinent information simply because they fear information they have is not sufficient for them to take action. This is exactly what Michael Steinhardt was preaching against.
The man who was known to have beaten S&P 500 multiple times in his life believed that nobody will ever have all the information he needs to be certain of an outcome of a certain industry trend. Therefore, investors should work with what they were given and should go in big and for big rewards when they feel that they have valuable and pertinent information about some company.
Always Keep Your Portfolio Diversified
One other investor, John Templeton, who will always be remembered as an ultimate bargain hunter and creator of modern mutual funds, advocates that researching industry trends and predicting the future value of company’s stock is futile. Instead, he believes that investor should always buy stocks he believes are currently undervalued and should sit on them until the time is right to sell them.
Knowing that some companies must fail in order for others to succeed, he believes that keeping an ultimately diversified portfolio of stocks should help everyone make their fortune on the stock market. By following this practice, he was literally running his own mutual fund even before mutual funds were acknowledged in the world of finance and investing.
Buy, Run and Watch it Grow
Finally, maybe the most successful investor of them all, Warren Buffet (founder and CEO of Berkshire Hathaway) is known for taking a long-term perspective instead of looking at investing short-term for purely speculative purposes.
His investing style is widely recognized at buying companies when their stock is perceived undervalued and taking a part in the management of these companies. Also, Warren is someone who is not known for selling his share in these companies after they are made rich and successful and after their market share and stock value grows. That’s when he starts collecting the fruits of his hard work.
Bottom Line
Circling back to what was mentioned in the very beginning – there is no ultimately proven investing formula that will work for everyone in any market and at any time. Market is ever changing and one must follow and try to keep up with all the changes in order to stay competitive. For instance, we are all aware of the cryptocurrency craze in the world today – this is definitely something that we should account for when investing our money today.
As with everything else in life, knowing how to juggle your money whether you are hunting for a new investment opportunity or you’re looking for an alternate way to find special offers during a holiday, is something that will surely bring a positive result.