“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 IS NOT 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.”