Could these 5 investing lessons turn you into a millionaire?

Here’s a look at five investing lessons from the likes of Warren Buffett and Benjamin Graham to help new investors set off on the right triack.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Two hands with dream house, car and travel.

Image source: Getty Images

Learning from the best in the investing game has always been a strategy worth pursuing. If you are committed to becoming a better investor, there’s a lot you can learn from the likes of Benjamin Graham, Warren Buffett and Richard Branson. These investors offer a wealth of knowledge that could help anyone become a better investor. Let’s dive straight in and explore their investing lessons.

[top_pitch]

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Benjamin Graham

We can only kick this off with the father of the value investing himself. In the words of Warren Buffett, Graham’s book, The Intelligent Investor: The Definitive Book on Value Investing, is one of the most influential investment guides ever written. It preaches the important investing principle of loss minimisation over profit maximisation.

Benjamin Graham wants investors to be guided by a rational plan that is completely shielded from the emotion that comes with both good and bad days in the market. He believes investors should ignore the short-term noise and keep their decisions focused on their long-term investing strategies. 

Warren Buffett

Investment philosophy 

One of the many investing lessons investors can learn from Warren Buffett is to have an investment philosophy. And for him, that has always been about having strong conviction. He strives to understand the businesses he invests in. If they make sense to him and he deems them worthy, he will bet big on them. If he doesn’t understand them or their industry, he will simply walk away without regrets. 

Invest in stocks over the long term

It’s no secret that Warren Buffett is a fan of investing in stocks that he plans to keep for life. He strongly believesn that over time, equities will do well. He also preaches the importance of taking the long-term approach to investing. This is why he is not so interested in the macroeconomics and the political environment that could affect the stock price in the short term. He is excited by the prospect of owning a piece of an amazing business with long-term earning potential. And this translates to more wealth for him and his shareholders.

His view is supported by the CNN Money guide on investment basics, which points out that over a longer period of time, stocks outperform all other investments. According to the guide, in the long run, stocks have returned an average of close to 10%. 

[middle_pitch]

Low-cost index funds

For the DIY investor, Buffett doesn’t recommend stocking picking. He advises investors to “own a cross-section of businesses that, in aggregate, are bound to do well.” It’s an investing lesson we can put into practice by investing in a low-cost index fund. It’s what Buffett plans to do. In the event of his death, his trustees are instructed to invest 90% of the cash for his wife into a low-cost S&P index fund.

Richard Branson 

You may be surprised by this entry on the list, but there is one valuable investing lesson that we could take from Richard Branson. When picking stocks, especially start-ups, for him the most important aspect is understanding the concept of the product at a first glance. This gives him confidence that the end user will also understand it.

He believes that if a product solves a problem for the customer, then there is a greater possibility of someone purchasing it. By extension, you can use this idea when picking investments. Before you invest, simply ask yourself how the company’s services or products are going to improve people’s lives. 

Final thoughts 

It goes without saying that fortune won’t come easy and you’ll make mistakes along the way. It’s essential that you do your own due diligence in the companies you plan to invest in. However, being aware of these great investing lessons could really help you maximise profits and minimise losses. 

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »