in this video i want to discuss some share investing principles some principles which will
serve you well if you are interested in investing in shares shares over the long haul are very
very good investment but you do need some basic guiding principles some rules to help you make
good decisions good investments that's what i'm going to look at in this video i'm going
to give you six principles or six rules and these rules will serve you well if you
adhere to them if you stick by them then you will make money in the stock market buying shares
holding shares in the mediums long term and you will make money a good return but you do
need to stick by the principles and their sound investment principles which i have not made up or
arrived at by some fanciful notion of studying textbooks or any other method but i've looked at
the principles and teaching used by two gentlemen who are probably the most successful investors
in the history of investing peter lynch and warren buffett and that's where these teachings come from
and i have applied them myself to my own portfolio in the last number of years and have done well
as a consequence and i've gained a fair degree of confidence as well in investing and in doing what
i'm doing first thing you need to be aware of and you need to be mindful of is that
you are not looking to predict the future you're not looking to predict the stock
market you're not looking to predict interest rates none of the macroeconomic
factors that might feed into an economy over a period of time are capable of prediction
with any degree of certainty so that's not what we're trying to do so don't delude yourself by
thinking that you can't make predictions about the stock market and how it's going to perform
over the medium term or short term and it is not really the stock market that you're concerned
about it's individual companies individual businesses and individual shares so the first
thing is don't worry about trying to predict anything don't worry about trying to forecast
with any degree of precision how interest rates or the stock market or anything else is going to go
secondly the buying a share or buying a stock but buying a share is not like buying a lottery ticket
or buying a bedding slip at the races if you go racing it's not a gamble what you are shouldn't
be a gambler what you are doing is you're buying a sliver or a piece of a company and so your job
is to identify the best companies for you to invest in so you're looking at sound companies
you're looking at businesses that you will know and understand and that's critical that's the
second principle though is that you are buying not a lottery ticket but you're buying a share
in a functioning company a functioning business the third thing you need to understand and
is comfort is the fact that as a small investor you have a big advantage in so far as you can buy
and sell whenever you choose to buy and sell unlike institutional investors who
will be a lot of the time pumping shares or pumping stock or selling stock on behalf of their
clients and on behalf of their either individual investor clients or companies for whom they are
engaged to place shares for to raise capital and so on you don't have to worry about that you can
make an informed objective judgment rational cold analysis of every company that you might
be interested in having a an interest in that you might be interested in buying a share in
so you've got time on your side in relation to getting the timing right you don't actually have
to get the timing right because if you bought for example microsoft when it floated you would
have made a fortune but if you made the fatal of what you might think is a fatal mistake of waiting
three years for example you would have made 10 times your money likewise with walmart when
walmart floated you would have if you bought the shares when it was first launched on the
stock exchange within a relatively short period of time you 500 times your original investment
when in fact if you held on uh for 10 years 10 years imagine you could have got your timing that
delayed that badly wrong you would have still made 35 times your original investment so time
is on your side as a small investor but you need to use it wisely you need to use it in order to
do a little bit of rudimentary fundamental research about the company
and about the shares that you're proposing to purchase in but that is the third principle fourth
investing companies who sell products or services that you know and understand
in other words we all know what ryanair does we all know what coca-cola does we all know what
total produce do for example to do fruit import bananas and so on and so forth used to be fives
but it's important that you actually have a fundamental understanding of the business
and what your company is engaged in
as opposed to taking a point on a company that's making some very high-tech risky obscure
perhaps artificial intelligence related thing or something of you know with advanced technology
that most normal people simply cannot understand if you buy shares in a company that you understand
then you have the comfort of knowing what they're doing essentially and you can from time to time
check them out and even carry out the most basic research for example if you've shares in dunkin
donuts you can go and visit or little or anywhere else for that matter if we're like if you're on
the stock exchange you can go and visit the stores and carry out some basic research yourself but you
would know from what's going on in your area and in your country for example whether stores
were closing down whether they were opening up whether they were expanding whether we're losing
market share for example in the retail market and so on and so forth but it's very very useful
to actually invest in companies who are engaged in a service or a product that you understand because
there's no point in buying something a complete pig in the poke in terms of um whatever they're
doing it's complete speculation then so knowing the company knowing what to do knowing the type of
business they're in knowing the industry they're in is very very useful fifthly there is there
has been 50 declines in the united states stock market or the stock exchange in the united states
the dow jones since uh over the last 100 years thereabouts 50 declines so on average it declines
by 10 every two years there's a fall or a drop that's a great opportunity over the
same period of time there has been i think it is 15 declines of 25 or more so 25 percent or more
is considered to be a bear market there's been 15 of those where the market has declined by 25
again that's a great opportunity to buy shares in companies at good value prices and finally
don't be too concerned about getting cheap chairs or a complete out and out stonewall bargain you're
far better off buying into a good company that's a solid performer over a long period of time rather
than taking the point on the company that's on his last legs and the shares appear to have fallen
through the floor and they looked like a bargain but they might look like a bargain but it's very
like somebody going to buy clothes or shoes or anything else what appears to be a real bargain
falls apart within a matter of a matter of months and what's quality is going to be with
you for the long haul and is the best method to adopt the best strategy to adopt in the long run
so there are the six principles if you stick by these six principles you will do well buying
shares investing in shares but you're not buying them to trade them you're not buying them to flip
them you're not buying them to speculate on very short-term price movements you're buying pieces of
good solid performing companies and you are then going about your business the companies are
going about their business and you will reap the benefit over a period of time through compounding
uh compound interest and the reinvested dividends that you receive and so on and so forth hope you
find this video useful as i say there are six seven principles that will serve you well they
are from peter lynch and warren buffett and those two gentlemen are probably the most successful
investors in shares and stock markets and so forth for ever anyway i hope you find the video
useful if you do i'd appreciate if you gave us the thumbs up down below thanks a lot you