Investment tips from a legendary journalist - May 15, 2016
You want to know more about investing and have some time to read? The world famous financial journalist, Andrew Tobias updated his almost 40 years old investment guide. If you don’t have the time but you’re curious, we created a brief of his advice. He believes many of the things we usually write here at Innovative Securities.
One of the most important tips he has is to “think long-term and leave your investments alone”. As Business Insider quotes Warren Buffett in their summary: "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes.” We also emphasized how important patience is when we are investing our money. According to Tobias, it’s also important to invest money that we won’t need for a longer period. This advice comes down to long-term investing as well.
Another thing he thinks is bad is to be influenced by emotions. As we stated before, a usual mistake investors make is to get scared and start selling their stocks when the market is starting to slow down. Professional investors usually wait in this case, since stocks usually go back up over the time.
Tobias believes that it is also a good idea to buy when markets are down, and to wait with selling when the prices went up, not the other way around. We usually give this advice here as well.
The journalist also underlines the importance of diversification. He also believes that diversifying over time is another good idea. As he states, not investing all the money we earn a month is a good idea, instead, his advice is to constantly invest a portion of our pay check.
Tobias writes that low-cost index funds are also a good idea, since they are relatively safe because of their diversified nature, even if they don’t always have huge returns. We at Innovative Securities usually take a similar approach to investing. We believe in highly diversified portfolios which on the long term can minimize the risks while maximizing profits.