The Best Investment Tips From Warren Buffet

Warren Buffet has two simple rules for investing. He says, "Rule No. 1: Never lose money. Rule 2: Don't forget rule No. 1." Buffet has followed these rules religiously by only investing in high-quality companies at the right price and selling his investments as soon as they became overvalued. This may sound simple, but practicing these two rules is the greatest challenge in investing.Mr. Buffet notes that the stock market is like a manic depressive. If you let it suck you into its greedy heights and unwarranted pessimism, you will lose money. Staying rational makes the difference. Below are five rules Warren Buffet has followed that have helped him make an $85 billion fortune.

Be In It For The Long Run

The quote 'my favorite holding period is forever' is often attributed to Mr. Buffet. He first said it in his 1998 shareholders' report, and it serves to illustrate one of his favorite investment maxims: 'be in it for the long run.' Highly influenced by the great value investor Benjamin Graham, Mr. Buffet believes to make real money in stocks, you shouldn't buy them with the intent on selling them. Instead, invest in companies you like and understand, especially when they are on the bargaining table. You 'like and understand' a company because it produces useful things or products to such a successful degree that it has strong and stable cash flow and is likely to grow for the foreseeable future. Most of these companies are considered 'Blue Chips' by seasoned investors.