Take advantage of investment advice for young professionals that zeros in on the consistent application of our Successful Investor philosophy and principles

The best investment advice for young professionals is to focus on consistency. A steady, middle-of-the-road approach offers better odds than erratic or extreme alternatives. That’s because it relies less on timing, or on guessing right about the future. Instead, it helps you take advantage of what you might think of as the laws of financial physics.

You still have to decide what stocks to buy and what stocks to sell, and some of your decisions will disappoint you. But with a Successful Investor approach, your best choices will produce a lot more profit over long periods, and will overwhelm the costs of your disappointments.

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Follow this investment advice for young professionals to make the most of your money

Investing success comes from making more right decisions than wrong ones over a long period of time.

Early in their investing careers, beginner investors have only a vague idea of the value of building an investment portfolio. These investment lessons provide some perspective on making better investment decisions.

If you ask investors who have a few decades of successful investing behind them, few, if any, will credit their success to any one investment or investing technique. Instead, most will talk about the value of everyday qualities like patience, consistency and a healthy sense of skepticism—in short, the kind of qualities that bring success in all aspects of life, not just investing.

Here are three tips to follow:

Tip #1: Approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.

Tip #2: Losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)

If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.

Tip #3: Consistency is crucial. You can’t succeed by applying our three-part formula three years out of four. If you try to do that, you run a serious risk of abandoning the formula when risk is at a peak. That’s when our formula serves you best, and failing to adhere to a sound investing approach can do the greatest harm to your net worth.

Investment advice for young professionals should include looking at the long-term picture

For many investors, setting aside inheritance money for their heirs and loved ones is a natural part of retirement planning. But doing this successfully is not easy, and fortunes rarely last for long.

One reason why so many family fortunes are lost over the long term is that the prospect of an inheritance can undermine the ambition of heirs. Many young people find it difficult to put their best efforts into low-paid, low-status entry-level jobs. If they expect to receive inheritance money, it may undermine their motivation all the more.

The best investment advice for young professionals is to pick stocks with fundamental value and hidden assets

If you want to invest like Warren Buffet, you have to take a broad view in making investment decisions—with a focus on fundamental value and paying special attention to hidden value.

One thing you won’t find in the making of Buffett’s stock-market fortune is a history of relying on any single investment theme or gimmick. The main contributor to his success is his history of excellent stock-picking, and his practice of holding his top picks for a long, long time.

Use our three-part Successful Investor approach to make the best investment decisions at any age

One key to a long and profitable investing career is to win by not losing. Stick with our three-part investing approach. Resist the temptation to act on impulse, emotion or tips. Stay out of investments that require extraordinary luck or timing. Likewise for anything that requires you to pay high and continuing fees and brokerage commissions. 

1. Hold mostly high-quality, dividend-paying stocks.
2. Spread your money out across most if not all of the five main economic sectors: Manufacturing & Industry, Resources & Commodities, Consumer, Finance and Utilities.
3. Downplay or stay out of stocks in the broker/media limelight.

What was the best piece of investing advice you received when you were young?

What is the biggest mistake you made as a young investor, and what would you tell young investors following that same path?