When it comes to making money by investment, there are so many ways to do it. All of the famous investors apply their own unique methodology to the analysis and investment process. Many have tried to replicate the techniques or process used by the famous investors, unfortunately, they have failed. Bear in mind that this isn’t something that you or I can copy 100%, there’re many other factors in play, which is why there can only be one Warren Buffett.
However, I can tell you that there is one thing that all the famous investors have in common.
“Don’t lose money.”
The pros could all make money in contradictory ways because they all know how to control their losses. They would diversify adequately and invest with a margin of safety. And often they would not stay long in a losing position whereby it would corrode they overall portfolio. Beside to not losing money, there’s another known secret in successful investing
“Buy low and sell high”
In fact, most of the investors failed to make money is because they have been doing the opposite. Why is that? Because they do not do their own research, let alone fundamental analysis, and they follow ‘tips’. Such mistake must be avoided! By first understanding the principles and fundamentals in investing, we’d have got a clear picture of how a company’s stock was doing, and if it is under or overpriced. This we could avoid paying premium for a highly priced stock.
Again it is back to the 2 simple rules.
Rule No. 1: Never lose money.
Rule No. 2: Never forget rule No.1
So apply these rules and take responsibility for your own decisions and investments, and you’ll benefit and grow as a successful investor.
2015 is coming to end in few days, Stress Proof Your Money would like to wish you a Happy New Year!