Investing in West Palm Beach is a great way to grow your wealth, but it’s important to keep some fundamentals in mind to get the best results possible. Luckily, there’s a lot of advice out there, some of it from the savviest investors the world has ever seen.
There are many pieces of wisdom you should consider when managing your investments. Learn just a few of the strategies that investment leaders use to grow their wealth.
A lot of people want to make money. How do you stand out from the rest of the pack? It helps to look at some of the world’s most notable investors.
As you might expect, some of the most revered investors are known for the investment companies they founded. We also chose to focus on the investors who made the biggest impact, such as by forging an investment path that many others would later follow (e.g., index mutual funds, international funds).
John Templeton was called “arguably the greatest global stock picker of the century” by Money in 1999. He also founded Templeton Funds, best known for its international fund lineup.
He was one of the first people to truly understand the importance of buying low and selling high. When the Great Depression hit, he used it as an opportunity to scoop up stocks at rock-bottom prices. He also sold high right before the internet bubble burst.
Suffice it to say, he navigated the 20th century’s biggest financial catastrophes without missing a beat. It all came down to avoiding the herd mentality and looking for the investments that made the most sense to him.[1]
Thomas Rowe Price Jr. Established the T. Rowe Price investment management firm in 1937. He is often referred to as the father of growth investing. Much like Templeton, the Great Depression informed Price’s investment strategy.
He understood that short-term trading could make money, but it came with more risk. He chose instead to do research on individual companies, looking at their fundamentals to determine how they would perform in the long run.
Rather than panicking when a stock lost value, he stuck to his process. This allowed him to ignore the cyclical ups and downs and ensured that he stuck with companies that grew in value over time.[2]
John Bogle, who founded The Vanguard Group in 1975, originated the idea of index mutual funds to track broad stock market performance through a lower cost option for individual investors.[3]
In many ways, this meant that he was able to take Price’s central insight – that long-term trading was an excellent way to make money in a lower-risk fashion – and give retail investors the financial instrument necessary to make money with it.
He also felt that long-term trading was important because it helped investors minimize the costs associated with management fees. Essentially, he determined ways for investors to make money, without fees taking away most of the gains they’d made.[4]
Warren Buffett, who is still widely regarded as the world’s most successful investor, preaches a very simple investment philosophy: Buy what you know.
Buffett has stuck to a strict discipline of buying companies for a low price, implementing long-term improvements and then profiting from those improvements via higher stock prices.
Known for sharing his investment insights, Warren Buffet is a big proponent of these principles:[5]
These are the principles that helped him attain a net worth of $96 billion. He’s currently the sixth richest person in the world, and he made the vast majority of that through his investments.[6]
Another investment great is Peter Lynch, the Fidelity fund manager who ran the Magellan Fund from 1977 to 1990. His fund outperformed the S&P 500 significantly, giving an average annual return of 29%.
He believed in investing throughout the long term, taking only as much risk as your stomach can handle and always spending at least as much time researching stock picks as you would to buy a house, car or major appliance.
While he emphasized research, the strategies he chose often varied based on the period during which he was investing. The point of this research was to ensure that he understood what he was investing, but also to understand how market conditions impacted investments.[7]
While investment legend Roy R. Neuberger—who co-founded the brokerage and investment firm Neuberger Berman—encouraged people to study the great investors, he cautioned against trying to emulate their success.
According to Neuberger, it is better to adopt only tactics that suit your temperament and circumstances because your needs and resources will be different from others.
This makes Neuberger an interesting counterpoint to Peter Lynch. While the former encouraged investors to focus on market environments, Neuberger focused on the needs of the individual investor. In both cases, the idea is to keep your eye on your specific situation, instead of blindly following a generalized tenet.[8]
We’d like to add to that wisdom the importance of working with a financial professional who understands your needs and goals. Feel free to tap our experience for help matching your situation to proven investment vehicles and strategies.
Of course, one of the best ways to determine your investment strategy is by working with qualified financial partners. At Legacy Financial Partners, we have years of experience helping people balance their portfolios and find investments that make sense.
Have any questions about what we can do for you? Looking for someone who can discuss your investments with you? Please don’t hesitate to reach out to us now via the information on our contact page. We’re always happy to help people utilize and grow their wealth.
Content prepared by Kara Stefan Communications.
1 Investopedia. Oct. 24, 2021. “The World’s Greatest Investors.” https://www.investopedia.com/world-s-11-greatest-investors-4773356. Accessed Nov. 5, 2021.
2Ibid.
3Robert Farrington. The College Investor. Oct. 23, 2021. “The Top 10 Investors of All Time.” https://thecollegeinvestor.com/972/the-top-10-investors-of-all-time/. Accessed Nov. 5, 2021.
4James Chen. Investopedia. Nov. 25, 2020. “John Bogle.” https://www.investopedia.com/terms/j/john_bogle.asp Accessed Jan. 24, 2022
5Simply Safe Dividends. 2021. “Top 10 Pieces of Investment Advice from Warren Buffett.” https://www.simplysafedividends.com/intelligent-income/posts/37-top-10-pieces-of-investment-advice-from-warren-buffett. Accessed Nov. 5, 2021.
6Forbes. 2021 “Forbes World’s Billionaires list: The Richest in 2021.” https://www.forbes.com/billionaires/ Accessed Nov. 5, 2021.
7Fidelity. Aug. 11, 2021. “Lessons from an investing legend.” https://www.fidelity.com/viewpoints/investing-ideas/peter-lynch-investment-strategy. Accessed Nov. 5, 2021.
8Anupam Nagar. Economic Times. July 17, 2021. “10 principles of successful investing from the legendary Roy R. Neuberger.” https://economictimes.indiatimes.com/markets/stocks/news/10-principles-of-successful-investing-from-the-legendary-roy-r-neuberger/articleshow/84498113.cms. Accessed Nov. 5, 2021.
We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.
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