Do you want to learn how to invest in the stock market here are top 5 tips
from billionaire investor Warren Buffett that made us millionaires by the age of 35.
hey guys it's Amber and Jerad here here at holy city family our goal is to empower you
to achieve financial independence and provide the best education for your children
so that everyone can pursue their dreams and ambitions
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This is awkward
tip number one know what you own so this one's about a few different things one of them being
stay in the circle of confidence stay in your circle of confidence and this is something
that's been used by Warren Buffett for years as a way to focus investors on only operating in the
areas that they know best and this is something that amber and i have done with our investing
over the last 15 years and it served us really well and just just so you guys are aware if you
don't already know Warren Buffett is known as a businessman and a philanthropist he's widely
considered the world's most successful investor and I talk about him a lot in a very nerdy way
as of October 2020 his net worth was listed at 80 billion dollars he is the chairman and CEO
of Berkshire Hathaway and what we want to do next is look at the 1996 Berkshire Hathaway shareholder
letter and go through that in some detail in this letter Warren Buffet writes what an investor needs
is the ability to correctly evaluate selected businesses note that word selected you don't have
to be an expert on every company or even many you only have to be able to evaluate companies
within your circle of competence the size of that circle is not very important knowing its
boundaries however is vital invest in products or services that you understand so it's important
that you ensure others actually love the products and the services apple is actually an example
if you're like us and I've ever owned an android and then converted to an iPhone you know what it
means to actually love a product tip number two look for good management at a high level
Warren Buffet looks for the following things in management intelligence initiative energy
and integrity let's take a look at a few different ways to analyze this in more detail here is simply
wall street's management section for apple here you can see Tim Cook's tenure and compensation
there's also a CEO compensation analysis
a breakdown of the leadership team and the board of directors
on glassdoor.com you can look at CEO approval ratings
pros and cons from employees ratings by demographics specific reviews for any
companies that you're considering investing in go to the investor relations page on their website
like this page for apple you can see a lot of great information like listen to the conference
call webcast as soon as the earnings reports are available you can look at the latest press release
you can look at the newsroom and financial data and even the the latest 10q tip number three find
companies with economic moats a great resource that we found for doing this is on morningstar.com
and what they use is called the Morningstar economic moat rating and this represents a
company's sustainable competitive advantage which is exactly what you want to look for a company
with an economic moat can fend off competition and earn high returns on capital for many years
to come Morningstar categorizes these modes as none narrow and large here is Morningstar stock
analysis for apple and as you can see the moat according to Morningstar for apple is narrow and
then it also has a it also has a trend below to see if that's stable or if the trend is changing
also get to know the competitors of the companies that you're looking at we found that finbox.com
has a great resource for this called performance versus valuation benchmarks and what we like about
this is it's just very easy to use and it has a great user interface make sure you subscribe to
our channel to see part two of our top 10 tips tip number four understand the business cycle
so according to Investopedia the business economic cycle is defined as the fluctuation of the economy
between periods of expansion and contraction factors such as the gross domestic product
GDP interest rates total employment and consumer spending can help determine the stage of the
economic cycle and here are the four stages as you can see in this visual expansion peak contraction
and trough so now that we've looked at the economic cycle visual we like a resource that we
found on fidelity's site and this one shows you at any given time i think they do it on a quarterly
basis but it will show you where the us is on that cycle china you can see is out in the front due to
partly to quicker emergence from the lockdowns from the pandemic and i like to keep an eye on
this on a regular basis just to see where the opportunities are and where the different major
economies are on this chart tip number five seize great opportunities missing out on an investment
can hurt worse than a bad investment yeah and if you go too small that can also be a mistake warren
Buffett actually admitted that he lost billions of dollars for Berkshire Hathaway doing this none
of those will show up in any stock performance reports or statements Warren Buffett also said
that you only get a handful of great opportunities in a lifetime so all of this is to say when you do
your research and you have a great opportunity and presents itself to you seize that moment and
make sure that you invest and you also invest the right amount at that time here's a quick recap of
the first five of our top 10 tips number one know what you own number two look for good management
number three find Companies with competitive moats number four understand the business cycle
number five seize great opportunities hey guys if you like this video hit the thumbs up button
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all of our videos are for informational purposes only and do not constitute
financial advice please do your own research and consult a certified and trusted financial planner
who will put your interests above their own before following any advice we may offer
you