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Young Investors

3 Mental Beliefs of Successful Investors

Friday, 13 December 2013

I’ve always believe in the concept of ‘Modelling’ and when it comes to investing, I’m a big fan of Warren Buffett’s Value Investing Strategies & Robert Kiyosaki’s Real Estate Development, Gold & Silver, and Oil investment strategies. While billionaire investors like Warren Buffett & George Soros apply different investment strategies, they all have common mental belief systems when they invest. In this post, I would like to share the 3 Mental Beliefs of Successful Millionaire and even Billionaire Investors!

First Belief – Do not predict the market!

When Warren Buffett invest, he imagines what happens if the stock market were to close for the next 10 years. He simply doesn’t care about what the market will do. Buffett once said, “Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future!”

Therefore, rather than looking for “Predictions! Predictions! Predictions!”, I rather focus on “Preparation! Preparation! Preparation!”

Second Belief – Diversification means Diworsification

I like Warren Buffett’s quote when he said, “Wide diversification is only required when investors do not understand what they are doing”. Buffett believes that diversification is for amateurs. Unfortunately, this is not the message that you will hear from financial planners and financial advisors who consults you when it comes to the matter of investments.

Third Belief – Always look for Low Risk, High Returns

I’m not sure about yourself but since young, I’ve always been taught that business & investments are risky. Surprisingly, when I look at some of the most successful entrepreneurs & investors, I found out that most of them are very risk adverse. As successful investors have seen how easy is it to lose money, they pay more attention to avoiding losses rather than chasing profits.

The single most important concept in all of investing, according to Benjamin Graham and later confirmed by his star student, Warren Buffett, comes down to 3 simple words: Margin of Safety.

Written by Jonathan Quek