“When a person with money meets a person with experience, the one with experience ends up with the money and the one with money leaves with experience.”
This was Warren Buffett’s response, on his 87th birthday, when asked about his best investment advice.
He says that experience is the ultimate key to be a successful investor.
However, what about those who are new to investing? What if you don’t have any experience?
Well, fortunately you can learn from investors who DO have experience – investors like Warren Buffett himself.
Take a look at these 8 proven investment tips from Warren Buffett:
1. Diversification isn't always a good idea
Many good investors stress the importance of diversification. But Warren Buffett tends to disagree with the idea.
Buffett says that diversification is for people who don’t know much about investing. An experienced investor should choose stocks on a long-term basis and should have faith on his/her investments.
Some investors diversify their portfolios because they are afraid that any one stock might sink their entire portfolio; but, while doing so, it becomes much harder to keep track of the current events impacting each company. So, by diversifying, they might reduce the volatility of their portfolio, but at the same time they reduce their focus on individual investments.
Buffett waits for opportunities to buy good stocks, and when those opportunities come his way, he takes full advantage. According to Buffett, “When it’s raining gold, put out the bucket not the thimble.”
2. Invest in yourself first
"The best investment you can make is in your own abilities. Anything you can do to develop your own abilities or business is likely to be more productive."
Warren Buffett says that the best investment one can make is on his/her own abilities. Most people are not going to make most of their money from the stock market. They’re going to make it from their careers. So put yourself first.
Buffett’s partner Charlie Munger had a similar thought. Munger’s secret to success: sell yourself an hour each day, and use that hour to make yourself better.
3. Trust yourself to be a successful investor
Buffett says that the hardest thing is to trust your investment decisions. You always think that others are right and you are wrong. Instead, you need to study and believe in yourself.
To be successful, you need to overcome the fear and not pay attention to what others are telling you. Accumulate knowledge and make investment decisions on your own to stand separate from the crown and be a winner.
See the rest of the story at Business Insider