When it comes to investing, it can be best to learn from, well, the best! With that in mind, there are many tips that come from all over the place, including X (formerly Twitter). But some don’t get the attention they deserve. Today, we’re going to look at three top tips for investors to consider from top investors themselves and an investment that makes sense after considering these tips.
Trade less
When it comes to investing, the longer you’ve been investing, the more you’ll realize that trading less can actually be far more lucrative than trading on a regular basis. There are many reasons for this, so let’s consider just a few of the top ones.
First off, there are the commission fees. While there are companies that offer zero commission fees, banks aren’t one of them. Because that’s how most Canadians are doing their trading, these are fees you’re going to pony up each and every time you trade.
On a longer-term basis, there’s the benefit of long-term investing. It’s been proven time and again that long-term returns will far outpace short-term ones. That is, unless you find that diamond-in-the-rough stock such as Nvidia that goes on to surge in share price. Most of the time, however, it’s best to choose your options and stick them out.
Into indexes
One way to make sure you’re trading less often is to consider index funds. These follow an index that can match right up with your long-term goals, short-term goals, or even just your overall risk profile.
Whether you’re looking to create passive income from dividends or follow the TSX 60 index, there’s an index for you. And what’s more, they provide you with a huge variety of options with the click of a button.
Finally, they’re cheap! You get this basket of investments for a fraction of the cost. And you can pick them up with low management expense ratios as well, leading you to bring in far more returns for far less than you paid out.
Be boring
Now, honestly, these two investment strategies are certainly boring in themselves already. But that’s why I like them! A key quote from heavyweight investor Warren Buffett is to invest in a company any idiot can run “because one day, an idiot will.”
These boring industries with a solid growth strategy are where you can find the best long-term holds. Take a company such as Constellation Software (TSX:CSU). The company is a serial acquirer of essential software—the tech you use every day without realizing it, from subway software to a library catalogue.
Yet these are essential, providing the company with the means to continue raking in cash they can use to acquire even more essential software providers. So, while it might be boring, your returns certainly won’t be. In the case of CSU stock, shares are up 246% in the last five years alone! In this case, boring is certainly better. And Constellation stock will be one that should continue to provide investors with growth by hitting up each and every one of these top investing tips.
