5 investment tips from billionaires around the world

We all are interested to gain more wealth, make more profits from our investments, and have a great life with no shortage of money! However, at times, small errors or sheer carelessness leads to losses which can be either huge or small, but it impacts us in a negative way. Many strategic investments have led to the creation of numerous billionaires; and though it might not help us achieve the same, it will definitely help us increase our wealth over time. Tips from billionaires like Warren Buffet, George Soros, etc., might be a bit advanced, however, many of their secret tips are simpler than expected. And we all love tips to increase our wealth, don’t we? So, listed below are five such investment strategies or tips which can help you increase your wealth: 

1. Patience  

Patience is the key to success in investing. David Tepper, President and Founder of Appaloosa Management Hedge Fund, believes that when it comes to success in investing, timing is everything. When the markets are not very promising, it is important to hold back. He states that the key to success in any investment is to wait. The toughest part of any activity is having patience to wait for the necessary outcome. This particular quality is crucial to succeed in any work or activity including investments! 

2. Before Investing in a Firm, Determine its Longevity 

Warren Buffett is well-known for his investing track records and how he built his wealth completely on the principles of value investing by Benjamin Graham. According to Warren Buffet, before you invest in any company, it is important that you must be able to analyze if the company will be successful in the long-term. A simple strategy, yet relevant! You must do your research on any company that you wish to invest your money in. Investment requires a lot of time and money, both of which are very crucial. This is one simple task, which will help you reap profits in the long run. 

3. Know your mistakes and correct them quickly 

George Soros, a hedge fund manager, who made a profit of $1 billion in a day by betting against the British pound in the year 1992, indicates that not all investments are successful. When a mistake takes place, you must be strong enough to own up for it and cut your losses. Having the courage to face your problems and correct them instantly helps in the long run. Once you are able to know your mistake, analyze it and correct it, it teaches you how to cover up for the loss. Understanding where you went wrong, is important, as this itself will give you the solution to get out of losses. 

4. Buy a stock that nobody wants 

A person who has a successful investing history than even Warren Buffet, Carl Icahn has an active strategy, where he invests in a stock that is undervalued and pulls out later to make large profits. He states that people tend to miss the assets and productivity of companies and watch their quarterly earnings performance instead. This is where Carl Icahn makes the big bucks! Many people in the stock market study stocks of companies which are undervalued but have the potential to grow in the long run. When most of the crowd is busy investing in the top stocks, these investors invest their money in a firm that will be profitable in future. However, this requires a good amount of study and research done on the company – its history, earnings, ratios, investments, etc. 

5. Have a portfolio which can handle Inflation as well as Growth 

The founder of Bridgewater Associates, the world`s biggest hedge fund, Ray Dalio, is an asset allocation specialist. He invests on the idea that over a period of time, the main asset classes face an increase in value and they will offer better returns than cash. He believes that having a diverse portfolio of stocks, bonds as well as commodities is the key to a successful investment. He also adds that once you have a diversified portfolio, you should hold that portfolio over time. A good and strong investor is one who ensures his portfolio has a mix of stocks which will help him get a return in the long run. Investing your money in one area is a risk that we must ideally not consider taking. It is always good to understand which are the top performing sectors and ensure your portfolio has a mix of many sectors. 

The tips mentioned might appear to be very simple and somethings which we all might be aware of. However, we barely implement this in our investments. We tend to follow the herd mentality at times and most of the times we fail in our research. We need to invest a little bit of our time to study and research on companies that we wish to invest in or which sectors are performing well. This research will ensure you have a good stock portfolio which will give you a good return in the long run. Along with these steps, also remember to save a portion of your income and not indulge in unmindful splurging. These are five simple yet effective investment tips from some of the greatest billionaires of the world, and I`m sure this will definitely help you increase your wealth as well! 

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Ved holds a Master's Degree in Management Studies in Finance from the ICFAI Business School Mumbai. He is extremely passionate about Equity markets and swears by the age-old maxim of “Time in the market is more important than timing the market”. He has in-depth knowledge & knack of the mutual fund industry and loves working on client portfolios and analyzing Mutual fund schemes on myriad subjective and objective parameters.