Guru Purnima 2019: Top money lessons - Warren Buffet to Rakesh Jhunjhunwala, 'guru gyan' to profit from

Guru Purnima 2019: A guru exists in every field and the field of investment is not an exception. They show the direction of trends and shed light on positive way forward or warn of dire consequences of certain actions, besides acting as well-spring of all kinds of wisdom. In short, they teach and even enlighten. This 'guru gyan' can indeed be very profitable. Warren Buffet, Charlie Munger, Peter Lynch and our very own Rakesh Jhunjhunwala are such geniuses whom investors follow.

Speaking on the role of the above-mentioned geniuses in achieving one's investment goals, Rahul Jain, Head, Personal Wealth Advisory at Edelweiss said, "These phenomenally successful investors, often touted as 'gurus' in the investment world, have amassed wealth through deft and prudent investments. On this special occasion of Guru Purnima, a day dedicated to remembering and thanking our teachers for their learnings, let us learn key investing lessons from these prominent ones."  Jain suggested the following top 5 investment lessons that investment gurus like Warren Buffet, Charlie Munger, Peter Lynch and Rakesh Jhunjhunwala strictly follow while investing:

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1] Be positive

Being optimistic is one of the key investment lessons, which the ‘Pied Piper of Indian Equities’ Rakesh Jhunjhunwala strongly advocates. The ace investor has ten commandments of investing and being positive is one among them. It’s important to note that any investment, especially market-linked ones, takes time to generate returns. 

Speaking on the returns Rahul Jain of Edelweiss said, "Returns depend on multiple factors and to be honest, most of them are beyond the control of investors. If you have made a fundamentally sound investment, the returns will follow in the long run."

2] Invest in what you know

When it comes to investing, ignorance can be dangerous. One of the famous investing principles of ace American investor Peter Lynch is to invest in what you know. Investors often land in a soup in their bid to chase high returns from instruments they are unaware of.  In the past, many have suffered heavy losses by parking their money in relatively unknown products, promising high returns. Therefore, it’s essential for you to do in-depth research about a financial instrument before taking a call. Know that “risk comes from not knowing what you are doing.”

3] Keep emotions out

If you follow the investment choices of Warren Buffet, the Oracle of Omaha, you will find that there’s no place for emotion. Buffet’s investments are backed by logic, numbers and facts. Adopting an emotional approach to investing can lead to bad choices that can have long-term ramifications. It's vital to cut the emotional quotient out of an investment. Also, often investors panic and exit markets following short-term volatility. The emotional fear of losing wealth often turns out to be counterproductive, resulting in impinging of life goals.

4] Learn from mistakes

The most successful investors in history have made mistakes in their investment journey. However, what has contributed to their success are the learnings from these errors, which they haven’t repeated. To put in other words, if you’ve made mistakes while investing, make sure not to repeat them in the future. The mistakes should be used as an opportunity to learn. Also, it’s a fact that wealth can’t be accumulated without burning fingers. Be it Dalal Street or Wall Street, it’s mistakes and the lessons learned from them that makes one successful. 

5] Turn volatility into an opportunity

Volatility is an integral part of an investment and is a result of several systematic and unsystematic risks. It’s this volatility that often scares away investors and leads them making erroneous choices. However, investment gurus through their investment philosophy have taught to turn volatility into an opportunity.

So, these crucial lessons from the doyens of investing can not only add to your wealth but also help you wrest control over your investments. These can help you make an informed choice and ensure you are on course of achieving all essential life goals.