Weekly Buzz: 💡 3 lessons from 3 investing legends

15 March 2024

One of the smartest ways to learn anything is to study the very best in the field – the people who have long, strong winning streaks. That’s why we’ve put together 3 practical lessons from these 3 legendary investors:

1. Warren Buffett: Think like an owner

Warren Buffett doesn’t play the stock market. When he buys shares, he considers himself a part-owner in the company, with a belief in the business and an intention to stick around. To channel your inner Buffett: treat each stock purchase as if you’re actually buying the whole company, and you intend to pass it down to your children.

It’s why he invests only in companies with rock-solid fundamentals (our Simply Finance section below breaks this down), top-notch management, and a competitive edge they can maintain.

Here’s an example of his “think like an owner” mantra: Buffett started buying Coca-Cola shares in 1988, attracted by its enduring brand, worldwide distribution network, and ability to generate consistent profits. He still holds those shares today.

2. John Bogle: Keep it simple (and cheap)

Why try to beat the market when you can be the market? John Bogle’s brainchild, Vanguard, pioneered low-cost index funds, making it possible for everyday investors to ride the waves of the market passively – and with minimal fees. After all, every cent forked over in fees is a cent not compounding on your behalf. And over a longer period of time, they can add up to a sizable chunk of potential earnings.

Bogle’s strategy is simple: keep it passive, keep costs low, and just let the market do its thing. That means investing in a broad swath of the market through cheap, globally-diversified ETFs (our General Investing portfolios are a good example!).

3. Ray Dalio: Build an all-weather portfolio

Ray Dalio’s “all-weather” portfolio originated from a simple question: which investments would do well no matter what’s happening in the economy? This led to a strategy that diversifies investments, so that they’re not all affected in the same way by economic changes.

Dalio thinks of assets in four categories: stocks for when the economy is growing and inflation is low, bonds for when the economy and inflation are weak, commodities for when growth and inflation are high, and inflation-linked securities for when the economy is down but inflation is up. Our ERAA® framework is similar in that regard – it takes into account economic growth and inflation, then optimises asset allocations according to the macroeconomic weather.

📰 In Other News: OPEC+ is extending its oil supply cuts

OPEC+, a group of the world’s biggest oil-producing countries, announced that it’s keeping supply cuts in place, in a bid to keep a grasp on oil prices. Anticipating the news, traders pulled international oil prices up 2% last week to USD $83 a barrel.

The group has made a habit of curbing production over the last two years, including a cut of 2.2 million barrels a day that was due to expire at the end of March. But because the US has been cranking out a record-breaking amount of oil over the last few months, OPEC+ is instead keeping that limit in place until the end of June.

The US is pumping enough crude oil to become less dependent on OPEC+, and it isn’t tied to the group’s negotiations. That means whenever the group decides to cut supply, the US can make up the difference, keeping oil prices steady.

These articles were written in collaboration with Finimize.

🎓 Simply Finance: Fundamental analysis

Simply put, fundamental analysis is like peeling back the layers of an onion to understand the true value of a company's stock. This means digging into the company's financial statements and examining the basics, like its earnings, assets, and liabilities.

By analysing these fundamentals, investors aim to gauge the intrinsic value of a stock, and determine whether it's overvalued, undervalued, or priced just right in the market. The stronger the fundamentals, the more likely the company is set up for long-term success.

🗓️ Save the Date

Have you ever felt lost or unsure about the next step in your career? Trust us, you’re not alone in this. 

Join us for a candid conversation about navigating career transitions as a woman. Leadership and career coach, Yolanda Yu, and Nandini Joshi, our Chief Operating Officer, will share their personal journeys and the lessons they’ve learnt. 

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