HGM has incorporated many of the principles of investment trading. I came across an article by a well-known investor and his advice is strikingly similar to our principles. Read the recommendations of Warren Buffett, who is the third richest man in the world. His conglomerate, Berkshire Hathaway, currently owns more than 60 companies. His wealth, his experience and, ultimately, his beginnings can be an inspiration to all of us.
“Don’t invest in something you don’t understand.”
Whether or not you know the financial product can be reflected in the final profits.
Of course, if you don’t dare to choose an investment strategy yourself in the beginning, you should approach a professional who will explain all the terms of the product to you in an unbiased and transparent way.
However, keep in mind that it is more beneficial for you in the future if you also take an interest in financial products yourself and thus improve your financial literacy. You will avoid unfavourable offers and unfair practices by financiers who would cheat you out of them.
“You can’t do good business with a bad person.”
In order to avoid such practices, it is important to work only with reputable persons who prefer transparency, accountability and individual approach instead of high commissions. And how do you know if you are dealing with such a person? For example, by the fact that the financial agent will inform you of the amount of the commission. Even the law requires him to do so. If he avoids answering, he will most likely benefit and you will benefit only minimally or even not at all.
“Time is the friend of great business, but the enemy of mediocre business.”
If you have only been concerned with how to invest or how much to start with, we would like to remind you that the most important thing is to get started in the first place. As soon as you can. Time is a very important factor in investing. Naturally, if you start investing as soon as possible, this increases the likelihood of better returns. Time also plays a significant role if there are dips in profits or even losses. That is to say, with a longer time horizon, it will be much easier to get your money back.
“Broad diversification is only necessary if investors don’t know what they are doing.”
We do not want to suggest that you should not, under any circumstances, break up your investments. But when you do decide to diversify, don’t do it just for fear of loss or out of ignorance.
“The price is what you pay. Value is what you get.”
If you decide to invest, compare multiple attributes. In addition to quality and price, the approach of the financial intermediary is also important. They should treat you fairly and individually. And, as we have already mentioned, they should give you all the information about the products in a responsible and unbiased manner. If this is not the case, don’t be afraid to switch institutions or intermediaries. Because if you are paying for something, it is not just about the product, but also about the resulting value.
“I read more, think more and make fewer impulsive decisions compared to most people in business.”
The market is characterised by dynamic changes. However, any change does not require hasty action. Sound reasoning is more important in investing than impulsive actions.
According to Warren Buffett, there is a lot of information being disseminated every day about price behaviour, changes in interest rates or other economic phenomena. However, he argues that one should not succumb to such noises and instead, actions should be considered. In the long run, it is also important to think about the performance of investments and not sell holdings right away for fear of loss.
“You don’t have to be a rocket scientist. Investing is not a game in which a man with an IQ of 160 attacks a man with an IQ of 130.”
While investing is not easy, it is not as difficult as one might think. As Buffett rightly pointed out, you really don’t have to be a scientist to make profits. There are a few rules to follow when investing. In addition to sound reasoning, you need to anticipate, watch the market, and be equally able to learn from wrong decisions.
“If you keep doing the same thing, you get the same result, over and over again.”
If you want to make profits in investing, you need to be able to tolerate risk and adapt to change. However, consider any change well and think about it in the long term. If you avoid overly risky stocks, look for more conservative or balanced forms of investing instead of dynamic ones.
“I always knew I was going to be rich. I never doubted it for a minute.”
Investing simply requires adrenaline, a willingness to take risks, make quick changes or constantly educate yourself. But to make it all make sense, always confidently hold on to your vision for success. After all, if others have succeeded, why shouldn’t you?
But what I like most are these statements.
“Investors who waited for corrections or anticipated where further corrections would be needed lost far more money than the amounts lost in the corrections themselves.” Predicting further market movements is likely to prove a very futile activity. A correction may or may not occur, and even if it does, it is a phenomenon we cannot predict. “I can’t recall ever seeing the name of anyone who waited for the right time to invest according to the list of the richest people compiled annually by Forbes magazine. If it were really possible to predict corrections, then surely someone would have made billions by now.”
It’s just that HGM-ak is still invested.