You know his name. You know his face. And he certainly knows what he does best.
Warren Buffett is one of the most powerful men in the world today. With a fortune of $89 billion, he is the fourth richest man today check more from here xmrprice
What is the secret to his success?
It all boils down to a very simple, uncomplicated business model. Buffett is the CEO of Berkshire Hathaway, a company that invests in other businesses. From technology to banking to food, Buffett has a keen eye for value and an uncanny ability to be in the right place at the right time.
His instincts have served him well. Berkshire Hathaway’s value has risen sharply since the 1990s. A share of the company’s stock is now worth $338,719.
So is Warren Buffett’s success due to his superior intellect, is he an exceptional case, or can perfectly normal people also succeed in stock market investing?
There is no denying it: these are turbulent times. We are witnessing rising inflation, falling interest rates and a more uncertain financial situation. In fact, the supply of term deposits from banks is now miniscule.
You may be tempted to give up out of frustration. It’s an oppressive feeling, isn’t it – how can you secure your financial future if you can’t see beyond your next paycheck? How do you do it?
But despite Warren Buffett’s phenomenal success, he’s not alone. Around the world, many people have made fortunes simply by investing a small portion of their savings in the stock market.
Don’t believe me?
If you invested $10,000 in Apple in 1980, you would earn $5,833,400 in 2019.
That’s an increase of more than 58,000% – an outrageous amount!
And if you think about it, this is not the only success story. What if you took a risk and invested in other early stage companies? Companies like Google, Netflix, Facebook…. Imagine how much better off you would be today.
Hindsight, as they say, is always 20/20, but the key to success is to start small. You won’t get anywhere if you’re not willing to invest.
What percentage of your portfolio should be invested in stocks?
Well, now may be a good time to be encouraged to invest. Maybe you’re starting to see the opportunities around you. Maybe you’re already dreaming of making your first million.
It’s a great feeling, isn’t it? You can imagine an early retirement filled with financial security and exotic vacations. It makes you smile wistfully, doesn’t it?
There’s nothing wrong with cherishing your dreams. But be careful if you get carried away with your emotions. You may be making a common rookie mistake: you invest a lot of money in a stock you’ve heard about that shows a lot of promise.
If you’re thinking about doing that Well, you need to step away from the abyss. This is definitely the wrong approach.
The golden rule is to never invest in something you can’t afford to lose. Also, you have to be careful and spread your money over several investments. It’s all about managing your risk appetite.
How can you do this?
Here’s one way: if you are willing to lose up to 35% of your money in stocks, you can invest about 80% of your money in stocks.
However, if you are not willing to take that risk, you can also take less risk. Don’t invest more than 10% of your money in stocks.
Remember: higher risk means potentially higher returns, while lower risk means potentially lower returns. Want to have a complete portfolio? Then invest with an eye toward a healthy balance between growth and safety.
