Investment is one way to increase the coffers of wealth. However, there are many factors that determine the success of your investment or business. There are a number of golden rules or Golden Rules that need to be considered before starting to invest. What are they?
Investing well is as much about doing the right things as it is about avoiding the wrong things.
The following are some important points of the Golden Rules that we must understand and implement in investing, so that we can make a profit.
1. never want to lose money in the market
These rules are in line with the advice put forward by the legendary investor, Warren Buffet. He emphasizes the importance of avoiding losses in a portfolio, because the more money you have in your portfolio, the more money you have in your portfolio. Thus, losses undermine our future earning power. The embodiment of the phrase never lose money actually refers to how our attitude is not to be easily lured by the potential benefits of investment. The considerations between profit and loss are important to evaluate before making an investment decision. So, according to Buffett, we should focus on the downside first.
2. Think like an owner
Co-chief investment officer at RMB Capital, Chris Graff, once said this. "Remember that you are investing in a business, not just stocks," he said. In stock investing, many investors treat it like they are in a gamble, even though there is a real business that is behind the stock. Stock is a fractional ownership share in a business, and because a business performs well or badly over time, a company's stock tends to follow the direction of its profitability. The above is related to our motivation in investing. Therefore, make fundamental analysis an important thing in determining the assessment and performance opinion of the business assets that we invest in the future. "Ensure the management team is strong and aligned with shareholder interests, and the company is in a strong financial and competitive position," said Graff.
3. Process oriented
This section is quite important because it underlies our attitude in facing every investment opportunity. The best investors develop processes that are consistent and successful across many market cycles, so failure doesn't mean failure. The purpose of this rule is how we can stick to the plans that have been made, without being sidetracked by the results that might be tempting. For example, we use a buy and hold approach to long-term investing, but at one point, we lose money. In this situation, you should not be easily swayed and easily change the initial strategy that has been implemented.
4. buy stocks when everyone is afraid to buy
When the market goes down, investors often sell or simply stop paying attention to the assets they own. But, that's when the bargaining happens. The stock market is the only market where things are being sold and everyone is too scared to buy. In fact, Warren Buffett once said, "Be afraid when others are greedy, and be greedy when others are fearful." We don't need to do anything else to keep buying. This structure makes us emotional and potentially out of the game. We should continue to buy stocks when they are cheaper and offer better long-term value. Investors who continued to buy throughout the 2020 dips are driving up stocks throughout 2022, and the same will likely be true of future dips as well.
5. Discipline for the rules you make
The discipline of continuing to save over time, in a good and difficult climate, even if they can only put aside a little, is quite important for investors. When doing this, we will get used to investment patterns and improvise our abilities. What's more, if investment costs are taken from our income, then we will be more responsible for the investments we make and more skilled in choosing potential assets.
what do you think boss, is this an important point in your investment plan[Surprised] [Surprised]
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