A More Secure Way to Make Money in the Share Market
Welcome to today’s trading tip.
You know, we can often get sidetracked and even enticed into thinking that buying and selling quickly in and out of financial markets is the way to generate meaningful returns on investment.
When in actual fact, when it comes to listed businesses on the share market, the facts show that the longer you hold quality listed businesses, the more money you’re going to make.
And there is no better example of that than the business that has been regarded for many, many years as the most trusted business in the world.
Do you know what it is?
It’s Berkshire Hathaway. That’s Warren Buffett’s business.
Now interesting enough, Berkshire Hathaway’s share price recently has been trading around $210 for it’s ‘Class B’ Shares.
While its ‘Class A’ shares have been trading at over $300,000 USD!
Now, of course, the only difference between the two is that one’s more expensive than the other.
In 1996, Berkshire Hathaway introduced its ‘Class B’ shares to give the average investor an opportunity to buy some shares in Berkshire Hathaway at a lower price.
Interesting enough, if you had have invested $10,000 in 1996, that investment today would be worth around $4.7 million USD.
Now, if you had of invested and bought Berkshire Hathaway back in 1980 with a $10,000 investment, that investment today would be worth a little over $10 million USD.
So the fact is, we could walk through a number of different listed businesses on the share market, but the bottom line is when you focus on quality and you buy those businesses and buy those shares at the right time (generally speaking, when the market has pulled back a little bit), trying to time specifically where the entry is, is not particularly fruitful over time.
The most important thing to build a solid return on investment, is to hold those listed businesses for an extended period of time.
I don’t know, a single billionaire trader in the world today that would argue against that strategy in the share market.
So if you’re looking to generate more returns on investment, solid gains over time, then give consideration to focusing on quality and give consideration to how long your timeframe is, because the shorter timeframe, the more riskier it is, and the harder it is to make money the longer the timeframe, the safer it is, and the better off you’re likely going to be. Until next time, happy trading.
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