How to Invest Like Warren Buffett

Warren Buffett has made a name for himself not only for sound judgment but also for quick action where investments are concerned. Starting from potatoes, Buffett has grown into one of the richest men in the world. Thankfully, he is a generous soul, always offering advice that others can follow to achieve the same levels of success in investments.

Although you won’t have ownership interest in the Singapore investments you make, you can learn how to invest like Warren Buffett to reduce loss and generate profit from your money. These tips are easy to understand albeit a bit hard to implement.

Consider the following:

  1. Buy Stocks Selectively

According to Warren Buffett, you should always have a list of the criteria to follow whenever you wish to buy stocks. For instance, you could look through the stocks available in a given industry or go for a particular price range.

He further advises that price isn’t the only factor to buying stocks. In fact, good companies sometimes dip in price due to the sector or the market – which conversely presents one of the best buying opportunity as long as your other criteria are met.

  1. Invest in the Familiar

Buffett also advises aspiring and current investors to only put their money on companies and industries they are familiar with. According to him, the better you understand something, the easier it will be for you to keep up to dated with company news and industry trends.

He cautions against investing based on hype or by following stock tips from other people. Rather, he says that you should research a company first if you are interested in investing in it.

  1. Stay in Cash

Where you can’t find a company that fits the investment criteria you established, the best thing to do would be to stay in cash. Warren Buffett advises that, contrary to popular opinion, cash is always a position to consider when no other positions are attractive enough.

  1. Follow

After investing in a company, follow it and get monthly updates on its progress. He warns against following too closely though because some companies adopt long-term strategies that would be best reviewed on a monthly basis.

  1. Know When to Sell

Even though you feel like a company’s stocks are worth holding onto, Warren Buffett advises that you need to know when to sell. To him, you should let go when the company you invested in no longer matches the reasons you invested in it in the first place.

For instance, if you had determined that it needed to be above its 2-year average stock price but it falls beneath this price, just sell your stocks and shares. Warren Buffett got to his current position because he always sells when the companies he invested in fail to fit in with his original criteria.

Bottom Line

Contrary to what most people think, Warren Buffett never pays any attention to the price movements of stocks on a daily basis. He also doesn’t care about the news and the latest technologies. However, he does have a unique understanding of business that few have managed to grasp.

Learning how to invest like Warren Buffett, therefore, will take some time. Still, this time will prove to be worth it once you master the strategies above. It will enable you grow your current savings and investments in the Singapore stock market in ways that would have completely been lost to you if you’d never followed the Buffett investment model.

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