Buy Like Buffett: Tips for Successful Investment Management

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Investors in the stock market have a tale of some missed investment opportunity that could have made them lots of cash. It might have been missing out on Walmart in its early days or failing to buy shares of Apple when Steve Jobs returned to the company. Everybody has regrets when it comes to investing. The important thing is to learn from the investing mistakes that you have made and not to do them again.

Let’s take a look at a few things that investors can do to improve their investing experience. Don’t be afraid of risk

Most investors fail to capitalize on great growth opportunities because they are too afraid to take risk. You cannot let fear control your investing decisions. Good investors have short-term memories when it comes to mistakes. A lot of investors have lost money by staying on the sidelines over the last two years. They remember when the market declined in 2008 and are afraid to take the chance of losing money again. Market dips and declines are actually the best investment opportunities for investors.

Don’t be afraid to swing for the fences

I am not suggesting that your whole portfolio should be invested in stocks that could be home run stocks but a small percentage should. You should be willing to invest in one or two small cap names that could become household names in the future. You can pick up a small cap exchange traded fund or small cap mutual fund and get some exposure to growth. These types of investments are the ones that can take your returns to a much higher level. You never know when you might catch lightning in a bottle with a small cap stock.

Don’t be afraid to be a contrarian

The best investors are those that are not afraid to go against the crowd. You can actually make some money for your portfolio by not following the herd and investing differently. This would mean buying growth stocks when they are out of favor in the market or picking up value stocks when analysts are telling everyone to sell. Going against the crowd has worked out really well for some of the world’s best investors who have been able to prove that the market consensus can be wrong.

Applying these tips to your investing life can help to make more cash for your investment portfolio.

Mark Riddix is the founder and president of New Horizons Financial Management, an independent investment advisory firm that provides personalized investing and asset management consulting. Mark is a regular contributor to Seeking Alpha and has written financial columns for Baltimore and Washington, D.C. area newspapers. Mark publishes his own financial blog, BuylikeBuffett.com and has written the book Your Financial Playbook.

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  1. ChuckG

    3 years ago

    I think people who can take risk can afford to lose money. With this economy there is a fear to place moneys where you won’t even break even. I use to buy software low and sell it high overseas. Can’t do that anymore. Europe hurts too.

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  2. vantagetrade

    3 years ago

    Taking risk is an important factor for being a trader.

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