Investing in the stock market can be confusing. Just like any specialized endeavor, there is a steep learning curve to it. There are technical terms to master, investing rules to abide by and several intricacies to understand and weave through.
All these exist for a reason. Investing involves risks, and uninformed or ill-advised investors may, at times, be a financial danger to themselves. This is where brokers, financial experts and the like come in. They assist and guide investors, especially newbies, learn the trade and prevent them from throwing away their life savings.
But stock investing need not be arcane. In this article, we will be divulging three of the best kept investing secrets of the world’s most successful investors.
1. Invest in stocks or companies that can offer a healthy stream of dividends
Billionaire Warren Buffet is regarded as one of the most successful investors in the history of investing. World leaders, CEOs and stock markets stop and listen when he speaks. That’s the kind of influence his success and track record have afforded him.
When scouting for a company or stock to invest in, Warren Buffet likes to seek out companies with very good fundamentals. So good that the company can run on autopilot. He says when investing, one should be prepared to invest in a company that is run by an idiot because chances are, a day will come when it will be helmed by one.
2. Find the value in less popular stocks
Wall street icon Carl Icahn is one of the most respected and hated investors in the business world. He made his mark buying his way into public corporations, and demanding radical and sometimes polarizing changes in management styles, and even leadership.
Icahn has said on numerous occasions that he likes to buy companies or stocks that no one wants. The philosophy may sound ridiculous at first, but Icahn’s approach is actually a very calculated and well-researched strategy. When investing, he pinpoints stocks that have low or poor price-to-earnings ratio or companies that have book values that exceed its current market valuation. He then aggressively campaigns for drastic changes that are designed to deliver significant value to shareholders.
3. Innovate on solid data and extensive research
Investment titan George Soros is considered as the best hedge fund manager in history. His company, Quantum Fund, has generated profits of close to $40 billion in four decades utilizing the “Soros Way,” an investment strategy that combines science, market feedback and instinct.
Soros is known for bucking the trend when it comes to investing. When his research supports it, he often makes massive bets against market trends. In 1992, George Soros made $1.5 billion in just a month after he bet against the British pound, earning him the title as the, “billionaire who broke the bank of England.”