What are the 5 Golden Investment lessons of Warren Buffett

 5 GOLDEN INVESTMENT LESSONS WARREN BUFFET LIVES BY - 

5 Golden Investment lessons by Warren Buffet not to miss:

Financial decisions have a very deep emphasis on any business, your cash flow and retention are equally important. So, Warren Buffet’s investing decisions will help you gain more wisdom on how to make good financial decisions for your business. All of us have heard about Warren Buffet, also known as the ‘ God of Investment’, one of the best and most generous people and investors. Here are the 5 Golden lessons Warren Buffet lives

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1 INVEST IN WHAT YOU UNDERSTAND

This lesson states that we should always invest in things we are aware of, if we are not aware of a certain business operation and if we try to invest our hardcore money in it, it can turn out a huge financial disaster. So always invest in places or companies which you know about and have a piece of clear information, never invest without any knowledge. And therefore Warren Buffet says, ‘ Risk comes from not knowing what you are doing” if you simply don't know what you are investing your money into by being blind, risk surely comes an unbearable risk arrives with it.

Warren Buffett himself has been investing in a simple business, Warren Buffett always suggests investing in simple companies as it makes your investment profitable. He even says that people who buy low coast funds are likely to be benefited more than people who go for high-cost funds. Many people thereby make the mistake of going for high-cost funds despite knowing nothing much about the risk associated with it.

2 INVEST IN PRODUCTIVE ASSETS

Warren Buffett suggests that you should invest your money in such productive assets, which means if you invest in a stock that will become more valuable, it will benefit you over time. Similarly, if you invest in a company whose market values diminish every year, you won't be able to get a good outcome.

Likewise, if you invest your surplus funds in buying a car rather than putting it in mutual funds or the stock market, it turns out to be unproductive. So focus on investing in productive assets that have more growth and returns in the future.

3 HAVE AN OWNERS MINDSET

Buffet advises investors that when we buy a stock, we should never consider it as just a  part of the company but invest in it having an owner's mindset. Suppose someone offers you to buy a company worth 600 crores, and you buy it in a  moment. You would have a detailed investigation, research, and all the legal documents to know about the goodwill and technicalities of the company.

Similarly, if you wish to invest in a company, always make sure that you research well about the company you invest in. So, don't get trapped in the present moment of stock price rather take some time to analyze the business.

“That whole idea that you own a business you know is vital to the investment process,” Warren Buffett

4 BE FEARFUL WHEN OTHERS ARE GREEDY AND BE GREEDY WHEN OTHERS ARE FEARFUL

There is a cycle of fear and greed involved in the stock market. When there is greed in the stock market people will pay even more price to buy a stock than required, so the stocks are overvalued. Similarly, when people develop a fear about some stocks they won't invest in, so even big business provide their stock at an undervalued price.

Warren Buffett helps us understand that when such a situation exists in the market we shouldn't the government by greed and fear, instead of when people are greedy we should be fearful and when people are fearful, we should be greedy.

“What investors need is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals,” Warren Buffett.

5 SAVE FOR A GOLDEN RAINY DAY

Warren Buffett always spends aggressively when money is expensive and holds on to money when it is cheap.

Every decade or so, dark clouds will fill the economic skies and they will briefly rain gold. When a downpour of that sort occurs. We must rush outdoors carrying washtubs and not teaspoons,” Warren Buffett.

Warren Buffett's books on the share market and warren Buffett's book on investing also help us understand the best lessons of his life. 

These 5 best lessons by Warren Buffett are some golden rules which help us make our investment decision more wise and profitable. Which decision do you like and how would you use it now?

Let us know in the comment section.