In­vest­ment ad­vice

Finweek English Edition - - LIFESTYLE -

In or­der to have a healthy re­tire­ment, one needs to plan far in ad­vance. In­vest­ing at an early age is seen as one of the pre­req­ui­sites to build­ing a solid re­tire­ment port­fo­lio. As such, glean­ing ad­vice from suc­cess­ful busi­ness peo­ple can of­fer us insight into how we can achieve a this goal. War­ren Buf­fett pro­vides us with five piv­otal in­vest­ment tips: 1. START WITH A FRAME­WORK “I bought a book in 1949 by Ben Gra­ham called The In­tel­li­gent In­vestor. I don’t re­mem­ber what I paid but it was the best in­vest­ment I ever made . . . If you have the right phi­los­o­phy, you will find op­por­tu­ni­ties.” 2. IT DOESN’T TAKE IQ “I tell peo­ple if you’re go­ing into the in­vest­ment busi­ness and have a 160 IQ, sell 30 of it to some­one else be­cause you won’t need it. I fig­ured out very early that you don’t have to be smart in this busi­ness, which is for­tu­nate. But you have to have the right tem­per­a­ment, and you have to be able to ig­nore what other peo­ple are say­ing and sim­ply look at the facts.” 3. THERE WILL BE MORE DOWN­TURNS “Peo­ple will con­tinue to make the same mis­takes they’ve made . . . Hu­mans think they’re Cin­derella at the ball. As the night goes along, the mu­sic gets bet­ter, the drinks flow – they all think they’re go­ing to leave at two min­utes to 12. And of course, there are no clocks on the wall, and they’re still danc­ing . . . so, we will have pe­ri­odic re­ces­sions and we’ll have the oc­ca­sional panic. Where the next panic comes from – who knows.” 4. OP­POR­TU­NITY “You will find op­por­tu­ni­ties as you go through the next 20, 30, 40, 50 years, and frankly, you’re most likely to find them in pe­ri­ods like five years ago when we were hav­ing the panic . . . It’ll hap­pen again – but buy when it hap­pens.” 5. LESS IS MORE “It’s a ter­ri­ble mis­take to think you have to have an opin­ion on ev­ery­thing. I tell stu­dents, if, when, they got out of school, they got a punch card with 20 punches on it and that’s all the in­vest­ment de­ci­sions they got to make in their en­tire life, they would get very rich be­cause they would think very care­fully about each one. You don’t need 20 de­ci­sions to get very rich. Four or five will prob­a­bly do over time.”

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