Investment wisdom: six tips from the great Warren Buffett

Investment Wisdom: Six Tips From The Great Warren Buffett

Warren Buffett is probably the world’s most successful investor of a generation.

He is famous for quotes such as “It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you’ll do things differently”. Wise words indeed – the kind of thinking that guides Brite Advisors!

Whether you’re an investor small or large – or just interested in how your pension might be utilised its worth listening to the great man as nobody does it better. So here are six tips we think you’ll appreciate.

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1.   “Someone is sitting in the shade today because someone planted a tree a long time ago”.

This is all about thinking long term when investing. Investing is not about timing but time. We should all look to the future and have a vision of what that might look like rather that worrying about short term peaks and troughs which often only lead to bad decisions and even losses.

2. “The investor of today does not profit from yesterday’s growth”

Just because something has done well in the past is no guarantee that it will perform in the future. Warren Buffett is well known for encouraging investors to do their research and find companies that plan for the future, who understand trends and anticipate where the market is headed. Any investment should have good prospects.

3. “Try to be fearful when others are greedy and greedy only when others are fearful.”

This is probably Buffett’s most well known quote. And it revolves around buying low and selling high and not getting taken in by all the hype and jumping on the bandwagon. You’d be surprised how often this happens in the investment world – especially when investors fail to buy in a market downturn that looks good value.

4. “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”

This is another great insight from Buffett which like many of his quotes refers to the long game. He reminds us investing is about minimising risk to generate wealth over the long term, not generating short-term profits.

5. “Anything can happen anytime in markets… Market forecasters will fill your ear but will never fill your wallet”

There’s lots of noise out there and predictions about markets – going up – crashing down – but nobody really knows what’s around the corner. Events can impact the markets – mostly only for the short term so it’s best to keep a long term perspective.

6. “The true investor welcomes volatility”

This is one of Buffett’s greatest contribution to the investment community as he’s saying that volatility should not be confused with risk. In fact volatility can be your friend and an opportunity as good investors will go into the market when prices have dropped or wait for the market to recover as it always has – thus reinforcing a long term strategy rather than attempting to make short term gains.

We hope you found these useful and interesting. Whatever you take from them remember to keep a long term view of investing as the markets have always been the best way of growing wealth over time.

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