How to Invest Like Legends

Almost anyone can make money in a booming economy, but only smart investors can say the same when the economy, and the stock market, heads south. If you haven’t been completely satisfied with the performance of your portfolio recently, learn how to invest like a billionaire by copying the moves of one of these financial geniuses:

Investment Ideas from Warren Buffet

Born in 1930 to a former stockbroker, Warren Buffet showed a talent for all things financial at a very young age. By the time he turned six, young Warren was making a small profit by selling soft drinks to his friends. Today, this investment icon is worth more than $50 billion. If you’d like to become a student of Buffettology, keep these tips in mind:

# Invest in What You Understand – This should be common sense, but many people don’t take the time to understand even their best investments. Warren Buffet never invests in a company that is outside of his “circle of confidence” because he finds it impossible to predict future performance when he doesn’t understand the core operation.

# Evaluate the Company’s Management – Warren Buffett evaluates the management of any potential investment based on three tenets. First, do they rationally balance reinvesting profits with maximizing stock values? Second, is management honest with investors? Third, does the management copy other organizations or develop new ideas and products?

# Look for Intrinsic Value – Warren Buffet prefers to invest in companies that have something special that sets them apart from the competition. This would be any quality that is hard to duplicate.

Investment Ideas from George Soros

Financier, philanthropist, author, and political philosopher, George Soros was a force to be reckoned with in the investment world before he retired in 2000. Also born in 1930, this investment mogul was born in Hungary and later immigrated to England before arriving in New York City.

With a net worth of about $14.5 billion, everyone can learn a lot about building wealth from this billionaire. If you’d like to invest Soros-style, here are a few things to think about:

# Move with the Herd – George Soros followed his belief that all investors influence each other and move as a herd. Most of the time, George just followed the crowd. Of course, he spent a lot of time analyzing these movements before simply going with the flow.

# Until It’s Time to Buck the Trend – However, he was the master at spotting opportunities for short-term gain and jumping ahead of the crowd to score big. His most famous move netted over a billion dollars in a single day. In 1992, he bet about $10 billion on a short-sale of the British pound. This rash, and very profitable, act earned him the notorious title of “the man who broke the Bank of England.”

# Go Big or Don’t Bother – Once George Soros decided that a value was going to go up or down in a big way, he usually made a big move of his own. Known for short-term speculation, George would take huge financial risks that were highly leveraged, or backed by borrowed funds.

Most of the time, they paid off. Sometimes, they didn’t, and George lost just as big. Before following this investment style, be sure you can afford to take the loss.

Investment Ideas from Donald Trump

Now that The Donald seems to be more interested in his TV persona than anything else, he has become the most talked-about billionaire in the nation. Donald followed in his real-estate developer father’s footsteps to become a very successful businessman.

Although not all of his investment ventures have been successful, Donald is currently worth anywhere from $150 million to $7 billion depending on who's keeping track. Want to be the CEO of your own little world just like The Donald? Follow these tips, and you might hit it just as big:

# The Right Time and The Right Place – Donald Trump is a master at spotting an opportunity and taking full advantage of the chance to make a buck.

# Be Brash and Bold – Donald is nothing if not impulsive. He doesn’t hesitate to follow his dreams and vision to the very limits of possibility; when he has an idea, he goes with it. Sometimes this pays off, and sometimes it doesn’t.

# Marketing is Key – Although Donald Trump likes to say he’s the world’s best real-estate developer, he’s actually a marketing genius as illustrated on his reality show, The Apprentice. This man knows how to turn just about anything into a valuable commodity.

# Don’t Let Anything Stop You – Donald is determined to keep going no matter how many times he fails. Although Trump almost always protects his personal assets, he has filed corporate bankruptcy four times due to new ventures that didn't go as expected. However, this hasn’t made him hesitate for a second before starting another project.

Checklist for Investors to Invest Like Legends

Research and Education: Continuously educate yourself about investing principles and market trends.
Clear Investment Goals: Define your financial goals and risk tolerance before investing.
Long-Term Perspective: Adopt a long-term investment horizon to ride out market fluctuations.
Diversification: Spread investments across different asset classes to mitigate risk.
Stable Income Sources: Ensure stable income sources before venturing into riskier investments.
Asset Allocation: Allocate assets based on your investment goals and risk profile.
Fundamental Analysis: Analyze companies based on fundamentals like earnings, growth, and industry trends.
Technical Analysis: Use technical indicators and charts for timing entry and exit points.
Market Timing: Avoid trying to time the market and focus on consistent investing.
Risk Management: Implement stop-loss orders and diversify to manage risk.
Patience and Discipline: Stick to your investment strategy and avoid emotional decisions.
Review and Adjust: Regularly review your portfolio and make adjustments as needed.
Tax Efficiency: Consider tax implications and utilize tax-efficient investment strategies.
Cost Management: Minimize investment costs like fees and commissions.
Investment Vehicles: Utilize a mix of stocks, bonds, mutual funds, ETFs, and other investment vehicles.
Active vs. Passive Investing: Decide between active management or passive index investing based on your preferences.
Dividend Investing: Consider dividend-paying stocks for steady income and potential growth.
Value Investing: Look for undervalued stocks with strong fundamentals for long-term gains.
Growth Investing: Invest in companies with high growth potential and innovative products.
Sector Diversification: Diversify across sectors to reduce concentration risk.
Global Opportunities: Explore international markets and diversify globally.
Economic and Political Factors: Consider macroeconomic factors and geopolitical events in your investment decisions.
Risk-Reward Ratio: Assess potential risks against expected rewards for each investment.
Exit Strategy: Have a clear exit strategy for each investment, including profit targets and stop-loss levels.
Continuous Learning and Adaptation: Stay updated with market developments, learn from mistakes, and adapt your strategy accordingly.