4 Keys To Succesful Investing

“Do not gamble. Buy good stocks. Keep them on until they rise and sell with a profit. If the shares are not going to rise, you should not buy them. “Timeless investing advice of one of the biggest investors in the early years, John Templeton.

But John Templeton has more timeless investing advice.

Success on the market is achieved by buying low and selling high. This simple strategy says everything, but is only used by a few people. There is to make money with options and futures, but that’s reserved for traders, not investors.

These are the four key elements that made John Templeton, one of the most successful investors of our time.

Investing tip # 1. Invest For Maximum Total Real Return

This means the return on invested dollars after taxes and after inflation. This is the only rational objective for most long-term investors. It is vital that you protect purchasing power. One of the biggest mistakes people make is putting too much money into fixed-income securities.

If inflation averages 4%, it will reduce the buying power of a $100,000 portfolio to $68,000 in just 10 years. In other words, to maintain the same buying power, that portfolio would have to grow to $147,000-a 47% gain simply to remain even over a decade. And this doesn’t even count taxes.

Investing tip # 2. Invest-Don’t Trade Or Speculate

The stock market is not a casino, but if you move in and out of stocks every time they move a point or two, or if you continually sell short… or deal only in options…or trade in futures…the market will be your casino. And, like most gamblers, you may lose eventually—or frequently. You may find your profits consumed by commissions.

Long-term owners of stock are usually better informed and more understanding of essential values; they are more patient and less emotional; they pay smaller capital gains taxes and the don’t incur unnecessary brokerage commissions