Think Like Warren Buffet

By | April 15, 2014

Think like Warren Buffet

There resources on the market that can tell you what to do and how to make money. But being honest the best example to follow is going to be Warren Buffet, he has made his money and he has been very successful at this and following his example and thinking like him could be the turning point for you and your investment portfolio.

The most important item to learn from Warren is not to allow your emotions in on the deal. If you are distracted by how you feel, it could lead you to make a mistake in your investment portfolio.

Learning about the company that you intend to invest in and make sure you feel comfortable with that company before you put any money in. But an important part of investing is making decisions, if you feel confident with the company and their ability to trade and make you money, then invest. But make sure that you are investing with a business mind and not an emotional head. This could lead you to an inability to stick with your investment and might cause you to move money and investments before they have had a chance to work.

You will end up paying more tax and commission this way too, it can cost you more than you make.

Warren Buffet and bench marking

If you are unsure about bench marking it is about an agreed point that you have decided, as your point of exit whether it is a high point or a low point, know these in advance and they can save you a lot of time and worry.

Bench marking is a great item to set when you are investigating the company, it will be at this point that you are learning information as to the past performance and the potential growth of the company. Setting the benchmark here takes the pressure off, you haven’t at this point invested in the company and this will make these decisions with less emotion and more with the logic and the information to hand.

How many companies to invest in

It is often a difficult question to answer but even though it is important that you spread your investment. It is also important that you are not spread too thinly because this will slow your investment potential down too great and can increase the length of time that you need to see return on your capital.

You can use many ways as a guide to how you want to invest in the markets. For instance, Warren Buffet chooses not to invest in mutual funds because of the potential of spreading the investment into too many different funds and this is against his ethos.

What is important is taking the information and using it for your purposes, plan how you intend to invest and put this plan into action. But beware it is possible to lose money as well as to make money on the stock market, the risk varies depending on the product but the risk is still evident.




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