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Benjamin Graham published an iconic book entitled “The Intelligent Investor” from 1949 and it talks about the psychology of investment and delayed gratification – both of which are common traits of successful investors. Don’t worry – no need to read it through – here’s a quick rundown of our takeaways!

 

The book focuses on long-term and more risk-averse methods of investing that are based on research and forecast, rather than speculations. Graham quips that the short-term market is a voting machine, while the long-term market is a weighing machine. This means with investmentswe won’t be able to tell how the markets would perform over the short term but if an investment is wise, the market is expected to deliver substantial value in the long run. A wise investment is an asset that you can hold with little impact on your lifestyle and will have a huge demand in the future.

 

 

Graham advises investors to learn from mistakes and stay persistent. In the 1929 stock crash, he learned hard lessons of risk when his capital got almost wiped out overnight. Instead of giving up though, he studied even harder. He persisted and soon succeeded.

 

Graham also believes that investing shouldn’t be a speculation or gamble. There should be a level of certainty in terms of ROI and a worthwhile yield over the inflation rate. He weighed in on undervalued assets with a strategy to buy when the commodity is depressed and sell at a time when it is on a high.

 

The book also talks about minimising downside risk for a good return-on-investment or buying below true value to use a margin of safety. Doing this will allow for greater profits or at the very least, a margin of safety on the downside. Good investing is buying when the price is lower than the true value and holding until the price exceeds its original value. Use the market’s greed and fear to your advantage. Find undervalued assets during downturns where there are plenty of bargains around and invest by the numbers.

 

 

See beyond the short and medium term and adopt a long-term vision for all your investment activities. Most of all, don’t forget that we’re rooting for you! Flick us a message or give us a buzz and we’ll help you through your property investing journey!


 

Flick us an email or give us a buzz!

Outside Accounting 

AddressLevel 2, 182 Vivian Street, Te Aro, Wellington 6011, New Zealand 
Mail: PO Box 24-457, Wellington 6142
Phone04 889 2975

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