Warren Buffett has been a successful investor for decades. In fact, he is one of the most successful investors ever.
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As we look ahead to 2024, when many financial experts call for a recession even though Treasury Secretary Janet Yellen told The Wall Street Journal we are heading for a soft landing, here are 5 of Buffet’s investment tips you can use.
Firms With Intrinsic Value Are Winners
Buffet made this statement about Apple products because they not only draw customers, but also keep them engaged with various linked services like Apple TV and Apple Music. Even though the phones are expensive, because they are an integral part of so many other things customers value, people pay the initial price and return for more. If an opportunity to add Apple or a similarly robust firm to your portfolio comes, take it, and ride through market changes with this company.
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Interest Rates : Value of Assets :: Gravity : Matter
When interest rates are low, money is easy for individuals and businesses to borrow. This leads to more spending, which leads to more profits, which leads to a higher value for assets. Similarly, when gravity is low, matter effectively weighs less and is able to rise. If interest rates rise in 2024, assets will be worth less, which just might make it a good time for you to invest if you’ve got money set aside.
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Let Your Investment Ride for Seven Years
Buffett advises you to have three to six months of savings to meet your emergency needs before investing. This is especially true if a recession is looming, as it may be in 2024. Why do you need these savings? Because you can’t react to every up and down in the market. You need to invest and leave your investments alone for seven years, during which the economy will cycle up and down.
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Stocks Are Not For Everyone
Buffett said that only some people are psychologically and emotionally fit for stocks because they are not short-term investments. The economy is not a static entity. Interest rates rise and fall. Other forces affect the stock market. Don’t put your money in stocks if you can’t leave it alone.
Bear Markets Are a Good Time To Buy Stocks
Recessions are the result of a sluggish economy. Often, this is related to higher interest rates. And, since higher interest rates are related to lower asset values, your sock portfolio will be worth less. Buffett describes himself as a net buyer of stocks, meaning he buys more than he sells. If you’ve got the confidence to pick stocks and hold them, 2024 could be a good time to pick up stocks you otherwise might not be able to afford.
This article originally appeared on GOBankingRates.com: Warren Buffett’s Top 5 Investment Tips For 2024
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