The expert advises to study in detail the assets for investment
In his opinion, investments need to be carefully planned.
The analyst shared his personal investment experience
International consortium of news organizations developing transparency standards.
Many investors use the advice of experienced experts to improve their performance. Including, the advice of a specialized specialist will not be superfluous for those who want to get the maximum profit from operations in the stock market in 2021.
BeInCrypto told the editorial staff of what rules to adhere to so that investments give the maximum result Dmitry Donetskiy, analyst of the investment financial company “Solid”.
Warren Buffet’s 6 Rules Of Investing
The expert graduated from Moscow State University in 2016 with a degree in political science, specialized in the problems of international trade between the Russian Federation and Italy. Since December 2014, Dmitry Donetskiy has been actively involved in the stock market, trading futures and shares on the Moscow Exchange. Since 2018, he has become an analyst and editor of the Wall Street Professional portal of the famous trader and investor Dmitry Cheryomushkin. Since 2020, he has been the head of the stock market analytical department at IFC JSC “Solid“, and is also the host of the company’s YouTube and Telegram channels. Has been working as an analyst for 3 years, at the same time he maintains his own investment portfolios.
Below is the author’s point of view of Dmitry Donetskiy about the rules of profitable investment.
The recipe for profitable investments from the company “Solid”
Indeed, there are several recommendations, rules, principles, adhering to which you will significantly reduce the risk of losing part of your investments, because the stock market is a risky investment. If you are just starting out, rely on the recommendations of specialists, check with analysts and managers why they offer this particular paper or company.
Over time, investing based on professional opinion, you will understand the intricacies of the movement of funds on the exchange. Start boldly. In the meantime, write down a few rules when purchasing securities and instruments, make a checklist for yourself.
1) Know what exactly you are buying
You’ve probably heard the words of Warren Buffett that he only invests in the business in which he understands. Understands what the company makes money on and what its business model is. In deciphering the words of the man who made an unthinkable $ 85 billion in the stock market, I recommend paying attention to the following points:
- Look at the financial performance of the company: how and on what it makes money. Metrics are usually published in company reports and presentations.
- What is the structure of the company’s revenue.
- What is the level of the company’s debt.
- Has the company been judged fairly? What is the stake when buying it? For dividends, for company growth, or for disclosing intrinsic value? Relatively speaking, what do you want? What do you want to make money on?
- Under what conditions can a company grow in price and under what conditions can it fall??
For example, when analyzing a company in the oil sector, you strive to buy shares of the company at an attractive price when the market has a low oil price, counting on future growth, because it is obvious that in the near future the states and industry will not give up oil, so that they do not promote “green”. This is an obvious investment in growth – in other words, this is the bet in investing..
Investing in a company whose business, let’s say, is fish farming (food production is a business that will never disappear – it always grows), you need to understand that fish is a biological creature prone to disease, death, and therefore your investments in some period may sink.
In short, if you ask the questions from the checklist and find the answers to them, you will know quite precisely what will happen to your money today and tomorrow..
2) Investment is not equal to “buy and hold”
One of the biggest misconceptions I see, even with experienced investors, is buy and hold. That is, in their opinion, investing is bought once and you keep the paper in your portfolio for many years. And by the way, many cite the fact that this is how Buffett works. However, Buffett acts a little differently, he also sells shares if he sees a deterioration in business or if the company has exhausted its growth..
If you see a deterioration in business, if you predict changes in the industry (as was the case with Kodak, for example), then sell securities.
3) Be prepared to lose investment capital
Sounds scary, I agree. But you must realize that investing is always a risk. In any area: business, buying real estate at the stage of the foundation pit, P2P loan platforms, paying for children’s education, even getting married is somewhat risky. The stock market is no exception.
Just agree with yourself at the stage before you invest in paper. If you do not want to risk it, invest in OFZs or deposit with a large bank. But it is unlikely that such investments will ensure you achieve the goal associated with the growth of income from them..
You can be business and trend savvy, highly informed, and almost professional in doing deals, but you can still lose everything. This has happened more than once in my memory. So get ready to lose your money.
4) Always be prepared for a crisis
The crisis, as you know, comes unexpectedly. You have seen for yourself how rapidly the stock market can fall. What does it mean to be prepared for a crisis? This means having a balanced portfolio – stocks, bonds, foreign exchange assets, free money, with which you can buy cheaper securities. An investment portfolio balanced by assets, companies, countries will save your money and nerves.
5) Investment is a long horizon
Investing is not a monthly salary from the stock market. This is securing your main goal. Having started doing this, introduce into the routine of your life an understanding of the mechanisms of the stock market, reinvestment of income, and regular portfolio rebalancing. Make the investment your job. This is the last rule that will help you to be confident, secure, secured in the near and distant future..
Make investing an automatic part of your life, just like brushing your teeth. In a year or two or five, you yourself will be surprised how far you have progressed in knowledge, confidence in the future and yourself..
Master the Six Basic Rules of Investing – Robert Kiyosaki
Recall, earlier BeInCrypto made the top 5 cryptocurrencies for investment in 2021.
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