Warren Buffett doesn’t need an introduction to the investors’ world. He is the world greatest Legendary investor in history and most generous man. Here is the 3 Warren Buffet Rules investors must follow:
- Keep it simple. You don’t need to be an expert in order to achieve good returns. Mr. Buffett always states buy stocks that you can easily understand and able to explain to others. Think about the products or service you or your family use everyday in any economic situation. Example, you brush daily and clean cloths and household items daily or weekly, and you eat and drink everyday even in recession times. So, buy the market leader stocks that produce these things. Great example is Procter & Gamble Company (NYSE:PG), if you look around your house, odds are you have at least one brand from Procter & Gamble.
- Ignore market noise and focus on long-term. Therefore, if you are focusing on micro and macro economic news, then you are simply wasting your time. If a business has good fundamental and profitable, then sit back and relax or buy more stocks at low price.
- “Focus on the future productivity of the asset you are considering, not the daily price change”. Buffett states that no one can 100% predict the future. Invest in dividend paying companies they have a habit of raising its distribution over time. In other word, invest to increase your cash flow, not just stocks.