8 biggest lessons new investors can learn from the pros

The role of a new investor can feel overwhelming and make you wish you had some one-on-one conversations with the best investors around. These tips act as useful substitutes and should help you feel more confident than investing blindly.

1. Bill Gross: Put 10 percent of your portfolio on a stock you really like

Besides being the co-founder of PIMCO, a Californian investment management firm, Bill Gross managed the PIMCO Total Return Fund, which is one of the world’s largest bond funds. You’ve probably heard that it’s usually good to diversify your portfolio.

However, you may not want to do that at the risk of missing out on a stock that’s performing well compared to others. So, take this advice and reserve 10 percent of your portfolio for a stock that makes you feel confident. Doing so may cause a substantial payoff.

2. Peter Lynch: Patience is an essential element of success

Investors agree that Peter Lynch is one of the foremost admirable investors, especially due to his association with the Magellan Fund. He advocates for being patient and holding onto your stocks, often pointing out the ones that performed best for him were ones he’d held for several years. If you’re thinking about selling, you may want to reconsider and wait it out to see if things change.

3. Geraldine Weiss: Focus on dividends rather than earnings

Although she’s now retired, Geraldine Weiss is considered the person who put women on the map in the investment world. She made investments by looking at dividends instead of a company’s earnings, due to believing it was too easy to manipulate the latter. You may want to take her approach and make history-based charts of dividend yields, and buy when they reach high points.

4. Julie Rains: Keep investment amounts small

Julie Rains is the creator of Investing to Thrive, a blog aimed at helping people get into investing without feeling fearful. One of the tips she gives is to remain sensible and don’t feel like you must have a lot of cash saved before starting to invest. She points out that some companies offer mutual funds with investments of just $100.

5. James “Rev Shark” Deporre: Review your trading regularly

As the CEO of Shark Asset Management and the creator of a website that educates active investors, James “Rev Shark Deporre” has plenty of advice for new investors. He cautions that although there are some repetitive patterns in the stock market, conditions are never identical. That’s why it’s necessary to review your trading activities continually, and if necessary, make adjustments to produce better results.

Deporre says the stock market never stops teaching the people who want to learn from it. With that in mind, you should constantly seek out expert investing advice throughout your career.

Warren Buffet’s strength lies in investing in private companies that outplay other competitors in the market. (Photo by USA White House via Wikimedia Commons.)

6. Warren Buffet: Put your investments in outstanding private companies

You can’t research investment tips for more than a few minutes without coming across advice from Warren Buffet — a man people constantly look to for guidance. Buffet consistently makes money by finding private companies that outperform their competitors and investing in them — but only at fair prices.

If you try that tactic, realize that it doesn’t require looking for cheap investments. Instead, weigh the expected value of the company and use that assessment to decide what seems like a reasonable price.

7. Michelle Scarver: Remain in the market during downturns

As a Principal at Exencial Wealth Advisors, Michelle Scarver has over three decades of financial experience. She loves using it to help her clients reach their goals through investing.

Concerning the subject of market plunges, she suggests staying in the market and keeping your emotions in check and not letting them get the better of you. Scarver believes downturns are historically not as long as expansions, and staying in the market during recessions lets you reap significant rewards when things improve.

8. Peter Thiel: Recognize companies that see value in unexpected places

Peter Thiel is a co-founder of PayPal and was Facebook’s first outside investor. He’s also written books with investment and entrepreneurial tips. Rather than being too dependent on investment decisions based on formulas, he suggests keeping your eye on companies that do things differently through disruptive business models that find value in places other people might overlook.

By trying that technique, you could find yourself with financial ties to a company at just the right time. Thiel also believes there’s no need to wait to start thinking big, and that the ability to do it sets people apart from the pack.

Consider displaying some of these tips in a visible place, such as your refrigerator or the bathroom mirror. When you see them often, you may be less likely to make hasty decisions and feel better equipped as a beginning investor.

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DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.