Thread by @myfinology

Investing lessons from one of the greatest investors of all time and the ultimate bargain hunter 💡

Sir John Templeton ⤵️

(1/17)

#StockMarket #investing

1) Invest for maximum total real return

This means check the return on your capital after adjusting for taxes and inflation.

Eg : If you park your money in a FD generating 6% return then actual return is not 6% as inflation would reduces your purchasing power.

(2/17)

2) Invest – don't trade or speculate

99% of the time, doing nothing is the best thing to do in market as the average investor who invests for long term will make same or more money than the one who is actively looking at the ticker to hunt trading opportunity.

(3/17)

3) Remain flexible open minded about investment types

There is no one kind of investment that is always best. There will be times to buy blue chip stocks, cyclical stocks, corporate bonds while in some period sitting on cash is advisable. So, you need to be flexible.

(4/17)

4) Buy Low

This strategy has been followed by almost all veteran investors which simply means buy the stock when most people are pessimistic and stock is available at bargain price.

(5/17)

5) When buying stocks, search for bargains among quality stocks

The job is not only to find an undervalued stock but the stock should meet the quality parameters such as proven management track record, brand name, market share, sound financials etc.

(6/17)

6) Buy value, not market trends or the economic outlook

Do not make your investing decisions based on market sentiments. A bear market does not necessarily mean that companies have weak fundamentals, your job is to find value and invest for long term.

(8/17)

7) Diversify

No matter how careful you are, you can neither predict nor control the future. So diversify—by industry, by asset class and by country.

(9/17)

8) Do your homework or hire wise experts to help you

Don't invest based on some tips or news. You should do your own due diligence before making an investing decision.

(9/17)

9) Aggressively monitor your investments

There are no stocks that you can buy and forget. Even long term investors need to manage their portfolios actively as market is changing too fast.

Being relaxed, as Hooper advised, doesn’t mean being complacent.

(10/17)

10) Don't Panic

The only certain thing with investing is uncertainty. There will be surges & downturns and it's important how you react in these events.

Successful investors are the ones who have far-ranging goals in mind and don’t get hung up on market swings.

(11/17)

11) Learn from your mistakes

No matter how skilled or experienced you are, you will have your own share of mistakes and regrets.

So forgive yourself for your errors. Don’t become discouraged, and instead, turn each mistake into a learning experience.

(12/17)

12) Begin with a prayer

A prayer will give you more confidence in anything that you do – simple and lucid.

(13/17)

13) Outperforming the market is difficult

The challenge is not simply making better investment decisions than the average investor. The real challenge is making investment decisions that are better than those of the professionals who manage the big institutions

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14) An investor who has all the answers does not even understand all the questions

Everything is in a constant state of change, and a wise investor recognizes that success is a process of continually seeking answers to new questions.

(15/17)

15) There is no free lunch

Never invest on sentiment. A company where you are employed may be a fine company but that doesn’t mean its stock is a fine investment. So, do not invest just for the sake of some discount your are getting in the IPO.

(16/17)

16) Do not be fearful or negative too often

Despite all the current gloom about the economy, and about the future, more people will have more money than ever before in history. And much of it will be invested in stocks.

Source: Franklin Templeton

(17/17)