Warren Buffett

Investing Ideas of American Investor, Warren Buffett

Stock Market

Warren Buffett is an American business investor, who also serves as the CEO of Berkshire Hathaway. He is also a synonym of success. Buffett He is one of the most successful investors in the world. We have stolen some of the golden investment tips from the personal diary of Warren Buffet. The great investor emphasized mainly on factors like future plans, investments, new accounting change, and inability to buy big companies. Following are some investment lessons written by Warren Buffett to all shareholders:

  1. Performance comes, performance goes. Fees never falter

While emphasizing on several factors, he talked about the fund-of-fund performance in his diary. American investor also mentioned that the investors believe that if the businesses of the investees are successful then their investments will be successful as well.

  1. Even Bond could be risky

During those days of 2012, long-term bonds were considered as the riskier investment than a long-term investment in common stocks. During that era, it is said that even a 1 percent annual rate of inflation would have decreased the buying -power of the government bond. This is one of the terrible mistakes made by the investors to measure their investment “risk” by their portfolio’s ratio of bonds to stocks. Usually, it is observed that the high-grade bonds in an investment portfolio increase its risk.

  1. A diversified portfolio is best

He also highlighted that in an upcoming day, week or even year, stocks will be riskier. The stocks will be far riskier than the short-term US bonds. It is believed that as the investor’s investment horizon lengthens, the diversified portfolio of US equities becomes less risky than bonds. However, in this case, it is assumed that the stocks are purchased at a sensible multiple of earnings relative to then-prevailing interest rates.

Leave a Reply

Your email address will not be published. Required fields are marked *