9 New Year Investing Resolutions
And this too shall pass - that's the lesson from the stock market we can learn. Through conflicts, wars, crisis, pandemics, shocks. And you think your life has bumps.
So if you're looking for a New Year Investing Resolutions here are some good ones Jim Simmons (hedge fund manager) and Warren Buffett have in common:
1. Invest in what you know: Both Buffett and Simmons recommend investing in companies and industries that you understand. This can help you make informed decisions about the potential risks and rewards of an investment.
2. Don't chase after short-term gains: Both investors advocate a long-term approach to investing, and advise against trying to time the market or chase after short-term gains.
3. Diversify your portfolio: Both Buffett and Simmons recommend diversifying your portfolio to spread risk and increase the chances of earning consistent returns over the long term. Consider mid and large caps and look at correlations to the market.
4. Keep your costs low: Both investors recommend minimizing costs, such as trading fees and fund expenses, to maximize returns.
5. Be patient: Both Buffett and Simmons advise investors to be patient and avoid making hasty decisions based on short-term market fluctuations.
6. Avoid leverage: Both investors caution against using leverage, or borrowing money to invest, as it can increase risk and amplify losses. Max I use for limited periods is 2x leverage on low volatility equities.
7. Don't get caught up in market hype: Both investors advise ignoring market hype and focusing on the underlying fundamentals of a company instead.
8. Stay disciplined: Both investors recommend sticking to a disciplined investment strategy and avoiding emotional decisions.
9. Keep learning: Both Buffett and Simmons emphasize the importance of continuously learning and staying up to date on market developments.
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Alpesh Patel OBE