It’s important to time and again revisit our mentors or gurus who taught us valuable lessons in life and the ways of living to stay wise and grounded.
On Teacher’s Day, we are thankful to all the teachers who have taught us at various points in our life. When it comes to investments, we will do well to learn from some of the investment gurus of our times. And yes, as the headline shows, we will not include Warren Buffett but other pioneers in the field this time.
Peter Lynch: When it comes to investing, Peter Lynch is a legend. He was in charge of the Fidelity Magellan fund from 1977 and 1990, during which period the fund returned 29 per cent! He is also the author of the investing classic- One Up On Wall Street.
Lynch believes that if one is investing in the stock markets, one should be able to stomach the risk or invest elsewhere. For example, if an investor would sell his stocks and exit if the market goes down 20 per cent, he should reduce his stock holdings. Lynch also says that one should not waste time predicting the stock markets.
Rather, an investor should not worry about things he cannot control and focus on the fundamentals of the companies where they have put their money. Also, an investor need not ‘kiss all the girls.’ Even if one misses some tenbaggers, one can always beat the market if one sticks to the fundamentals and stays invested long-term.
Rakesh Jhunjhunwala: A list of investment gurus is never complete without Rakesh Jhunjhunwala, also known as the Warren Buffet of India. Jhunjhunwala believes that emotions should not lead investors; instead, they should suppress their emotions and behave like machines to succeed in investing. Also, investors should never miss an opportunity when they see one. He also believes in investing in companies with a competitive edge and whose products or services are difficult to replicate. Finally, he believes that investing is like life--you need to learn from your mistakes and treat them as a learning experience.
Benjamin Graham: Known as the father of value investing, Benjamin Graham’s investing lessons have inspired many legendary investors, including Warren Buffet. Graham says that when you least expect it, Mr. Market can be very unpredictable and volatile. Instead of paying attention to the mood swings of Mr. Market, investors should look at their investments objectively.
They should understand that the markets may be moody and accept it and have patience. Also, he says that one should never invest in something without doing due diligence just because everyone else is doing it or because they are telling you to.
Dave Ramsey: American personal finance personality, radio show host, author, and businessman Dave Ramsay has some very simple investment rules that one could swear by. He says that one should always set goals when investing and save 15 per cent of their income for retirement. He also advises choosing good growth stocks and mutual funds and investing with a long-term perspective. Finally, he suggests that one should always take help from an investing professional.
John Bogle: The founder of the Vanguard Group, Bogle, pioneered the first low-cost index fund- the Vanguard 500 which aimed to match the performance of the S&P 500 for a minimal fee. Bogle believed that mere savings could never be enough for people to achieve their financial goals, and investing in equities is a must. He also insisted that investors start investing early, as time is an investor’s most valuable friend. He also strongly propagated investing in the entire stock market through an index fund and then doing nothing but letting the market take its course.