How to invest in stocks for the long term
Before you buy a stock...
The best advice for successful long-term investing is to ensure yourself that you’re prepared before buying a stock! All the successful investors like Warren Buffett have build their skills by gradually learning over time and by reading.
Check list before investing:
1. Ensure you have the right mindset and understand the basics about investing and businesses (chapters 8 and 20 from the Intelligent Investor and the first 2 blog articles)
2. Ask yourself if you have the right behavior to make your own decisions and to still sleep well when your money is invested
3. Start with a small amount (you should never invest all your money at once, especially not when starting) in an S&P 500 ETF and a very good business at a reasonable price (this will allow you to test your behavior)
4. Make sure that you do not need the money in the next 5-10 years or more and that you have enough cash to cover 3-6 months (or more depending on your situation) of expenses
5. Pay-off high interest debt first! This is the most certain investment
6. Have reasonable expectation and try to learn over time
7. Be honest about your own skills: which companies do you understand and how certain are you about the future cash flows? Do you understand the moat or competitive advantage of the business?
Coca-Cola Long-Term Success Example
Best investing books
Favorite reading suggestions by the best investors
Best books to read before you invest!
Long Term Stock Investing Articles to understand
Understanding the fundamental investing principles of Warren Buffett will help you to better understand the investing process. This article will present the four principles that are recommended by Warren Buffett. Organizing your investment thoughts around these four principles will help in achieving satisfactory investment results. Furthermore, understanding these four fundamentals will help you to better control your emotions and develop the right investing philosophy.
Warren Buffett gave many insights about how he invests in stocks over the years. In the previous article we discussed the investing
Investment risk is commonly understood in terms of volatility in the world of Finance. This academic definition of investment risk is fundamentally different from the view of Warren Buffett on risk. This article discusses the differences in these viewpoints on investment risks and explains why it is essential to understand investment risk correctly.
Investor behavior is probably the most important factor for investment success. Warren Buffett's investment behavior advice will help to increase success.
What is the best business according to Warren Buffett? A business that has the highest rate of return on tangible capital over time. This requires characteristics that will be discussed in this article. Finding such a business can greatly increase your investment returns over time.
The most important factor for selecting stocks for long term is picking a business with a strong and durable competitive advantage or moat. A strong lasting moat and a reasonable purchasing price increase the chances of long term investing success.