Value investor can be defined as putting money to work to start or expand a project, purchase an asset or interest. Here is where all those funds are then put to work, with the goal to income and increased value over time. The term "investment" can refer to any mechanism that generate future income. In the financial sense, this includes the purchase of bonds, stocks or real estate property among several others. Here we will talk about the investment in detail and knowing more about stocks, return, real estate and bonds. In the courses we will take more in detailed.
Summary:
Investing in stocks yields the highest possible returns
Stocks are parts of a business and not things that fluctuate in price
Value investing is about buying great companies at discount prices
Value investing is a low-risk, high reward strategy
Value investing is a long term strategy
Benjamin Graham is the father of Value Investing and Buffett’s mentor
Stock prices can divert significantly from underlying business values
Compounded interest is the key to exponential returns
It is normal for beginners to seek an advisor however the advisor have it's own thinking you maybe cannot tolerate or not be able to do your own way. The advisor may help you but in the end it is still you who made the decision. In this lesson I will tell you why you are probably better off investing your own money instead of having an advisor do it for you, since what is good for your advisor may not necessarily be good for you.
Summary:
There is a structural conflict of interest between advisors and their clients (you)
Advisors are primarily seeking to maximize commissions and fees
Advisors focus on frequent rather than on profitable trading
You should probably avoid even honest advisors, because they tend to earn you only mediocre returns
The cause of this is a short term, relative performance orientation
Value investors regularly under perform in the short run, but come out as the clear winners in the long run
You don’t need an advisor, because you can quite easily do it yourself
You can practice investing with zero risk involved by opening a virtual portfolio
In this third lesson we cover some of the most common reasons why people lose money on the stock market, and how you can avoid these traps to achieve the investment success you are aiming for.
Summary:
Just like advisors and professional money managers, individual investors suffer from a short term, relative performance bias
Fear and greed are the primary drivers behind short term price movements
Growing your wealth takes time, there is no shortcut
Many investors buy on hype and sell on pessimism, which absolutely destroys their returns
Ignoring most of the financial news is a great way to stay out of trouble
Be indifferent to the stocks you want to own, let the numbers and facts determine your decisions instead
Think for yourself and try not to get caught up in herd behavior
A stock price should only be considered low relative to the value of the underlying company, not relative to the price on a previous point in time
Frequent trading leads to high transaction costs, which has a huge impact on your total returns. So make infrequent, big investments rather than frequent, small investments
In today’s lesson I’ll guide you through the process of defining realistic investment goals. We’ll talk about time frame, expected returns, and the amount of money you should invest.
Summary:
It is crucial to have a clear understanding of what your investment goals are to be able to stick to your strategy
Not many people earn a living through investing alone
Avoiding losses is the most important prerequisite to investment success
A loss interrupts the compounding process and is very hard to earn back
Focus on minimizing downside risk, rather than on returns
Over time the returns will come
Clearly define why you want to invest and how much money you need to earn to reach those goals
Don’t invest with borrowed money or money that you might need soon
Invest 10% of your monthly income
Check if your goals are realistic based on historical stock market returns, the money you plan to invest, your time frame, and the money you need to earn to reach your goals
With value investing, risk and reward are inversely correlated