Successful Investors. With that in mind, we present lessons from great investors, so that you are even safer when investing your money.See how the biggest investors work and apply these tips in your management!
Successful Investors You Must Know
Harry Max Markowitz
Markowitz is the creator of modern investment portfolio theory, for which he received the Nobel Prize in Economics in 1990 . This theory revolutionized the elaboration of portfolios, based on the search for the best return combined with the lowest possible risk exposure.
The first lesson we present here is from him.
1. Do not spray
Markowitz warns of the importance of differentiating spray diversification . The spraying occurs when the investor spreads the money in assets with similar behavior and high correlation.
This is not a smart strategy, as a financial market problem affects the portfolio as a whole, impacting yields.
To diversify, assets must have low correlation . Thus, a crisis in a certain sector impacts only a part of its capital, and the rest remains protected.
Warren Buffett
With a fortune estimated at over $100 billion, knowing Buffett’s history and method of investing is a must for anyone looking to grow wealth.
The American philanthropist brings two important insights to investors.
2. Focus on the long term
Buffett is a big believer in the power of compound interest and how money can multiply when invested in good assets for a long time.
Thus, he argues that it is possible to expect consistent returns in the future, as long as the right decisions are taken.
Buffett also says that shareholders must act as partners in companies, even if they have acquired a small share. The analysis must be done as if the purchase was for the entire company.
3. Go against the current
One of the most difficult attitudes for investors is to adopt a posture contrary to that of the majority.
The market tends to alternate moments of optimism and pessimism, which impacts asset values, and Buffett argues that it is necessary to identify opportunities and take a position in the face of these fluctuations.
This posture can open up opportunities to acquire assets that are low, for example.
George Soros
George Soros, known as an extremely daring speculator, is a risk-taking investor who knows the threats in the stock world.
Soros brings important insights into how to protect your investment and how to behave in the face of market ups and downs.
4. Diversify your investments
Precisely because he is a very aggressive investor, Soros is a faithful practitioner of the motto “don’t put all your eggs in one basket”.
He knows very well how to diversify investments, a strategy you already know to further dilute the loss margin.
5. Control your emotions
Another essential aspect of a great investor, and very well mastered by George Soros, is the control of one’s emotions.
Investing must be seen as a rational activity. Seeing it as fun can be a mistake for those who want to invest intelligently and get good returns.
Peter Lynch
The American Peter Lynch was the manager of the largest equity fund in the world, the Fidelity Magellan Fund. Under his management, the fund had an average annual return of 29%, a very interesting figure.
His is the sixth teaching we present.
6. Focus on the long term
The main mentality adopted by Lynch in investments is that good returns happen in the long term , if the money is invested in the right companies. This is thanks to compound interest.
For Lynch, investors lose more money focusing on short-term analysis than on market swings.
We learned from him that, if you choose good assets, you shouldn’t worry about any downfalls. The best strategy is to leave the money there, as these numbers recover and the compound interest will do the job of increasing your equity.
Luiz Barsi Filho
Barsi Filho is currently one of the biggest Brazilian investors and his methodology is well adapted to the national reality. Therefore, it is worth checking two important teachings defended by him.
7. Be a consistent investor
More than 99% of people trading on the stock exchange have a trader profile, that is, they seek to trade their shares to make a profit.
However, the real winners are long-term investors. People who valuate assets in depth are the ones who get much better returns, as they use objective criteria and approach investments in a rational and disciplined manner.
8. Draw your goal
Assess how much you can apply and think about how much you need to reach your goal. Based on these two points, try to identify roles within your risk profile in order to have a clear idea of how long it will take to reach the expected return.
lily parisotto
Parisotto had a real journey to become one of the biggest Brazilian investors. The former farmer, born in the interior of Rio Grande do Sul, had Videolar as his first venture, a company that was leader in the national market for the production of CDs and DVDs.
With the capital acquired through this business, Parisotto got the necessary amount to invest in the stock market, accumulating successes, but also mistakes that became lessons learned.
Check out a great lesson from this investor.
9. Avoid getting into IPOs
IPOs are public stock offerings, which occur when companies go public on the stock exchange.
As these companies arrive with great publicity, they tend to charge more for quotas, which harms the beginning investor.
Jim Simons
Considered the “wizard” of finance, Jim Simons founded Renaissance Technologies , responsible for managing the Medallion Fund , one of the most profitable hedge funds in history.
And it is precisely this fund that brings an important investment lesson.
10. Adopt quantitative analysis as a strategy
Simons believes that investment decisions must be made based on a completely rational analysis and that each financial asset follows a pattern of behavior which can be explored by the investor in order to make the best choices.
For this, it uses algorithms and software to identify the ideal deals, focusing on pure and concrete data.
Understand how Magnetis can help you invest
Here we present 10 very important lessons for those who want to work on investments with more property. But by choosing Magnetis, you have even more advantages to invest more and better .
With specialized professionals and high expertise, we apply the best practices to your portfolio. In addition, we have as an ally state-of-the-art technology, capable of evaluating more than 20 thousand assets and choosing the most suitable for your portfolio, within your investor profile and focused on your goals.
