🔥Warren Buffett value investing way

396 views Jan 6, 2023

How to find an investment with your broker (CAPTIONS on) I shall note that these investment principles are more effective when used combined, in a mix of short and long term analysis, rather than cherry picking one or two of them. 1. Currency Cost Averaging This is a tool of buying a fixed currency amount (i.e pounds) of a particular investment on a regular schedule e.g every last day of the month, regardless of the share price. Thus, the result is that the investor purchases more shares when prices are low and fewer shares when prices are high. This, as most of the investment principles in this post, can be automated through your broker. And, in this way, give you peace of mind with the operation. When it comes to the investment field, yourself is your worst enemy. Therefore, automating your execution can be a clever plan to ensure you are paying yourself first. See below an example of the function in action. INVESTMENT PRINCIPLES 2. Compound Interest “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it“. – A. Einstein We calculate compound interest on the initial principal and also on the accumulated interest of previous periods of a deposit. It is the “interest on interest”. It will make a sum grow at a faster rate than simple interest, which is calculated only on the principal amount. The formula for calculating compound interest is: Compound Interest = Total amount of Principal and Future Value less Present Value. = [P (1 + i)n] – P