Golden RULES Of INVESTING You Must Learn

Dollars and investment


Investment can be a smart way to grow your wealth over time. It involves putting your money into assets like stocks, bonds, real estate, or businesses with the expectation of earning a return.However, they are golden rules of investment you must follow .

1. Know What You Own

Most investors think a stock is a lottery ticket. However, behind every stock is a company. Figure out what the company does and what it is worth.

2. Focus on the long term

The stock market always goes up in the long-term.

However, in the short term it can easily go up and down.

Stay focused on the long-term, and you will be rewarded.

3. Stock market declines are opportunities

Most people think declines are times to panic when in reality they are times to go on offense.

4. Don’t focus on the macro

There is nothing that you can do about the economy, interest rates, or the overall stock market.

However, you can control your research into great companies and finding the next big thing.

5. Don’t over-diversify

Buying individual stocks is hard.

Warren Buffett believes in owning a few stocks and knowing everything about those stocks.

6. Buy Index Funds

If you don’t have a passion for researching individual stocks, then you should simply buy index funds that track the S & P 500 and Nasdaq

7. If the business does well, the stock will eventually follow

If the stock is down but the business is doing great. The stock price will eventually catch up to the business.

When you invest in stocks, you should find stocks that are on a discount

8. Focus on small profitable companies

If you can find a small-profitable company that is a leader in a growing niche, you have the chance for a BIG win

9. Invest in yourself

The best investment that you can make is an investment in yourself.

10. Look forward, not to the past

The investor of today does not profit from yesterdays growth.

You should always focus on finding new opportunities.

11. Free cash flow is 👑

Jeff Bezos calls free-cash flow the ultimate financial metric

Investors should focus on free-cash flow and not earnings

12. The best holding period is forever

When Warren Buffett invests in a stock, he looks for companies that he can hold forever.

This should be the same for you

It’s important to research and diversify your investments, consider your risk tolerance, and think long-term. Consult with a financial advisor for personalized advice tailored to your financial goals and circumstances.

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