How to Think Like an Investment Guru?
There are certain traits that successful investors have and certain ones that they learn and cultivate. Thinking like an investment guru may take time, but here at Trading Education, we're passionate about giving you the tools you need to start on your investment journey and grow your wealth. We've looked at some of the greatest investors out there and what you can learn from them.
One of the best tools any investor can have is knowledge. Understanding what you're investing in, looking at what's going on in the world and trying to learn as much as possible about everything, all of these are key to being a truly great investor. This Telegraph study of John Maynard Keynes features the quote "As time goes on, I get more convinced that the right method in investment is to put fairly large sums into enterprises which one knows something about and in the management of which one thoroughly believes." Notice the part about 'one knows something' - making investments in areas you don't know anything about is a risky move, so do your research and learn as much as you can. The more you know about, the more you know what to invest in.
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Look for opportunities others might pass on
Part of being a great investor is seeing potential and opportunities where others don't. Being able to look at the big picture, conduct forex technical analysis, and approach things in a different way is a great skill that can be cultivated and grown. Carl Icahn, one of the world's richest men, is a great example of this. His bold and unique approach is discussed at length in this value walk article. By looking at the value and assets of a company, gaining control and splitting them up into far more profitable companies, he managed to make money from a range of different companies he could see the potential in, where others didn't.
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Some people may think that investors live lavish lifestyles and throw money around. But truly outstanding investors know the value of money, and not to waste it. Looking at investment guru, Warren Buffet's profile on Forbes magazine's website is truly impressive. With a net worth of $87 billion dollars, you may be surprised to know that he still lives in the same home in Omaha he bought in 1958 for $31,000. His two famous rules - 1. Don't lose money and 2. Don't forget about rule no. 1, show us that being careful with money and making sensible, smart decisions is another important aspect of thinking like an investment guru.
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Think Long Term
One of the most important investment strategies you can use is thinking long term. None of our investment gurus set out to 'get rich quick'. They understand that investment is a long process, and patience can give the greatest rewards. A great example of this is Philip Fisher - the American stock investor who wrote the bestselling 'Common Stocks and Uncommon Profits'. The Wall Street Survivor blog lists ways to invest like Philip Fisher such as invest in companies that have the potential to grow and invest for the long term. His buy and hold approach meant he could sell his investments when they were the most profitable, and his long-term approach allowed him to build a valuable portfolio of investments over a whole lifetime.
By looking at some of the richest people in the world, and studying the way they think and approach investments, you can start to introduce investment strategies that are proven for success. For more information and tips on investing head to Trading Education and start learning now.
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