27 Investing Quotes You Should Know Before Investing A Single Dollar
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Investing your money is easier than ever, with plenty of great trading platforms to choose from. Making money is the hard part. You need to consider a lot of factors and scenarios. To keep you inspired and on the right path, here are some of the best investing quotes to keep in mind during the ups and (especially) the downs.
“An investment in knowledge pays the best interest.” – Benjamin Franklin
Knowledge plays a very important role in our life. It can help you make better decisions, perform better and help you make more money. Knowledge couldn’t be more important when it comes to investment.
To make better investment decisions, you have to do your research first and immerse yourself with as much relevant information as you can. Benjamin Franklin understands the value of being constantly hungry for knowledge. You should always educate yourself through business books, audiobooks, etc. No one benefits more from an investment in yourself than you. With tons of knowledge, you’ll be able to analyze all your options and make better decisions. Read at least 30 minutes a day and study the lives of other successful investors. It’s also helpful if you watch biographies to understand how other people made it big in the investment world.
“Rule number one: Don’t lose money. Rule number two: Don’t forget rule number one.” — Warren Buffett
No list of investing quotes is complete without at least one quote from Warren Buffett, the Oracle of Omaha. Investing in the stock market is not a place for gamblers to bet their money and hope to go home with pockets full of cash. When you lose money, the remaining funds have to perform much better to regain your losses. That is why successful investors focus on risk first instead of returns. Losses are an inevitable aspect of any investing. Even acclaimed investors like Warren Buffett had their fair share of losses. But always remember that what makes them great investors is that they rarely take on big losses.
“It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.” – John Neff
Many people like to invest in well known “blue chip” stocks and put their life’s savings there. While this may sound like a wise decision, you may have already missed the ride up for these successful companies. Underdogs are still present even in today’s market. With proper research, you can find a diamond in the rough through some stocks that are less popular. If you see an opportunity on a stock that has a strong path to future profits, invest in it. John Neff credits his success to putting his investment on the not-so-popular stocks.
“There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it.” – Peter Lynch
One of the biggest fallacies in Wall Street is that complexity is an important component of superior performance. A lot of investors are guilty of falling for that. Complex investment strategies are often designed to benefit those that manage and promote them. Unless you have an expert level of intimacy with a product, a better option is to buy investments that are transparent and straightforward.
“In investing, what is comfortable is rarely profitable.” – Robert Arnott
You are more likely to achieve greatness when you step out of your comfort zone and try things that you never thought you could do. You get to unleash a different strength and skills that you thought you never possessed. It’s only when you push yourself harder that you get to know your full potential. Sure, investing in a safe stock may sound like a smart idea. But when almost everyone is invested in the same stock, it’s hard for it to continue growing – and the fall could be dramatic indeed.
“Every once in a while, the market does something so stupid it takes your breath away.” – Jim Cramer
One of the most important traits that you must possess as an investor is adaptability. You should be resilient enough to stand strong yet you must also be flexible enough to embrace new angles. This way, you don’t get buried when the stock market does something irrational. Get up and think of a new strategy. Winners don’t quit in times of adversity.
“The most important quality for an investor is temperament, not intellect.” – Warren Buffett
Correcting a previous item: No list of investing quotes is complete without at least two lines from Warren Buffett. You don’t need to be a mathematical genius to prosper in the investment world. You just need to understand and respect the ultimate weapon of the stock market, which is human behavior. A lot of investors get trapped in the mistake of not appreciating the behavioral aspects of investing. The biggest problem and worst enemy of an investor are himself. So if you’re going to study quant models to decipher and master the investment world, you must also understand the emotions, instincts, and tendencies of investment behavior.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki
You may be able to make a lot of money in your investment ventures, but the real question is this: How much of these earnings are you able to save? You may have reached your first million at the age of 30 but it’s worthless when you blow it all by the age of 40. Your goal should not just be focused on your earnings but also on the maintenance and sustainability of these earnings. Carefully diversify your investment portfolio and make it grow. Work hard to achieve financial security not just in your current generation but also for many generations to come.
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson
Investment is not about placing your bet on a card and feeling the rush of excitement as you wait if you win or lose. Instead, it requires careful planning and meticulously evaluating all the possible angles. This may sound boring for some adrenaline-driven individuals, however, nothing beats the rush of excitement when you see your gains over time.
“The biggest risk of all is not taking one.” – Mellody Hobson
The co-CEO of Chicago-based Ariel Investments became its president at just 31 years old for a reason: she understands that rewards don’t come without risk. But, the thing every investor must know is there is a difference between good risk and bad risk. The key is understanding how to spot that difference.
“Time in the market beats timing the market.” – Ken Fisher
Never underestimate the power of dollar-cost averaging – and the anguish it saves you. A long term investing strategy is almost always a better strategy than trying to time a downturn perfectly. As is a strategy that removes all emotion. Set it, forget it and you will win.
“Be fearful when others are greedy. Be greedy when others are fearful.” — Warren Buffett
Everyone thinks they can follow this one—until it comes time to be greedy. You may never perfectly time the bottom, but the market has historically gone up, and if you can remind yourself of that, you will be a very wealthy person.
“Invest for the long haul. Don’t get too greedy and don’t get too scared.” – Shelby M.C. Davis
A more moderate version of Mr. Buffett’s fear/greed advice. But is it any easier to follow? Turn the trading screens off and find out.
“It is better to be roughly right than precisely wrong.” — John Maynard Keynes
Not every investment needs to be a bullseye. Just don’t miss your target completely. A lifetime average gain of 10% is better than 100% once and losing every other year. This is why index funds exist.
“With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.” — Carlos Slim Helu
What’s past is prologue. History doesn’t repeat itself, but it often rhymes. There’s a reason so much advice references finding patterns in history, and investing tips are no different.
“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” — Benjamin Graham
Stop comparing yourself to other people and market returns and do what’s best for your future. And remember, patience will win nine times out of ten.
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch
You probably know someone who needs to be reminded that stock tickers actually stand for something. Never blindly invest in, or trade, a company if you don’t know why its ticker is going up or down. That is a recipe for financial disaster.
“Given a 10% chance of a 100 times payoff, you should take that bet every time.” — Jeff Bezos
A one-in-ten chance of profitability seems bad, but the expected value of that bet is a 10X return. Who would turn that down? That is, if you’re not risking everything on that chance of success. The key to investing in 100x payoff companies or investments is first understanding how much you’re willing to lose.
“The stock market is a device to transfer money from the impatient to the patient.” — Warren Buffett
Which one are you? If you didn’t answer “patient” you might be in for a future filled with financial pain and suffering. There are moments of instant gratification in the market, but for 99% of investors, a patient plan is a winning plan.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” — Robert Kiyosaki
Who are you investing for, anyway? The more money you keep, the more money that money can (and will) make you. Compound interest is a beautiful thing. So why do so many people never take advantage of it?
“Don’t look for the needle in the haystack. Just buy the haystack!” — John Bogle
Passive index investing works, and Bogle proved it with Vanguard. The historical average return for the S&P 500 is around 11% per year. Sure it has it’s big wins and losses, but if you can get an 11% return (on average) on your portfolio, you’re going to be very rich.
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” — Charlie Munger
Keep calm and don’t let that big brain overreact. And remember to look at the fundamentals of a company. If the price is crashing and nothing has fundamentally changed, why would you sell now? On the flip side, if everything has changed, sometimes its best to cut your losses and move on.
“The four most dangerous words in investing are: ‘this time it’s different.’” — Sir John Templeton
Dismiss the past at your own peril. The best example of this would be someone who blindly bets big on unproven companies rather than investing for the long haul. If you have proven to be a terrible picker of stocks, might it be best to simply invest in index funds?
“Wide diversification is only required when investors do not understand what they are doing.” — Warren Buffett
Buffett loves to rail against diversification, which likely sends Bogle spinning. That said, Buffett is the exception and not the norm. And he even believes the average investor should buy index funds.
“Sometimes buying early on the way down looks like being wrong, but it isn’t.” — Seth Klarman
It’s rare to buy a stock right at its bottom tick. That doesn’t mean you aren’t buying incredible value. Market manipulation exists and sometimes the stock of a really great company might get crushed by some short term panic. On the flip side, sometimes a terrible company (like GameStop) might get manipulated in the opposite direction. In the long run, it’s better to own the great company than the one that is having a very short term moment.
“In the short run, the market is a voting machine. In the long run, it is a weighing machine.” — Benjamin Graham
Think about that one for a second. Go on, we can wait.
Final Word on Investing Quotes
The investment world can sometimes be cold and brutal. Thankfully, great investors of the past and present have shared wise and useful nuggets of inspirational quotes. Whenever you feel shaken, discouraged, or stuck, refer back to these investing quotes and get back on your feet again.