Following are the investment mantras of Warren Buffet which will help you earn good returns on your investments.

Invest in business, not in the stock

Before investing your money, do an analysis of the company. When investing, think of it as buying into a private business. Before making investment take into account the past performance, financial health, management of the company. This way you steer clear of companies whose stock is likely to rise even if they are dubious. Take your own investment decisions and don’t believe in hearsay.

Make investment in that you understand

Don’t have a cavalier attitude when it comes to investments. It is not a wise idea to approach your investments as a gamble. Invest your funds in the businesses that you understand. Take help of a financial advisor if need be. If you don’t have information about the business, then don’t invest your money in that. If you can’t understand the process even after trying, then let it go.

Investment in recognized companies

Invest your money in recognized companies for good returns. Before investing, consider the future performance of the company. It will help you to get good returns in the future. Stock markets are filled with companies that are there today and gone tomorrow. With thorough research one will be able to identify them before they cause him any harm.

Investment in long-term

Haste is not an ally when it comes to your investments. Investments in long-term are safer as compared to investments in the short-term. Long-term investments will give you good returns in the future. It is advised to hold on to your investments despite the periodic market fluctuations. An investment by Warren Buffet of $10 million in Washington Post Company in 1973 was valued at $1 billion in 2003.

Avoid short-term fluctuation

Markets, by nature are volatile and prone to fluctuations. Hence it is important to approach the investments responsibly. If your fundamentals are sound then you don’t need to worry. Markets have the tendency to overreact; one must not worry about these fluctuations. Keep your fundamentals right and invest your money for the long term. These short term fluctuations will come and go.

Buy low and sell high

Along with Warren Buffet this mantra can also be verified by Carlos Slim. Carlos Slim is known as the Warren Buffet of Mexico. Carlos Slim invested heavily in the markets due to this philosophy during the Mexican economic downturn of 1980’s.The basic rule of investment in stock is to buy at a low price and sell at a high price. In other words, buy the stocks in recession and sell in inflation.

Calculate the returns

Calculate how much return you will get after selling the stock. You have to take into account brokerage charges to your broker as well. This will further cut down the profits of your investments. The calculation of returns on investments is important. Being informed helps, an investor must always know exactly how much can he gain out of his investments?

The History of the Modern Portfolio

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