Investment in the stock market has something for everyone, no matter the trend. Whether you are a conservative buyer or a risk-taker, the stock market has an option for you every single time. Despite its ability to churn money from money, the stock market has had to bear the brunt of criticism for its volatility, often due to inexplicable circumstances. These are some of the most popular phrases you might hear when contemplating how to increase your purchasing power. Although many are skeptical about investing due to this very aspect, many others seem to get it to spot on, all the time!
Here are the top 5 most popular stock traders who seem to have cracked the code and who can inspire you to create a zero-commission free trading account on Alpaca.
If there was to be a compilation, he had to feature on the top. He is popularly known as the “Oracle of Omaha,” and his quant trading enterprise Berkshire Hathaway is now a major shareholder in some of the most profitable and well-known companies. How? It’s simple. Buffet watches the market closely and leaves when he can churn the maximum out of what he dubs as ‘cigar bud companies’.
These companies are sick entities that have been abandoned but which have great potential to turn around. By parking his funds in these companies, he can ensure a long term investment strategy and exits while the company is still minting profit. This shrewd stock trader has been hailed for his intuitive knowledge of the market, something he mastered during his adolescence, and has made some amazing marketing decisions.
Some of the many noteworthy companies whose stocks he owns are GEICO, Duracell, Kraft Heinz, American Express, Coca-Cola, Bank of America, Apple, and Wells Fargo. Buffet believes that the key to making the right investment is doing the right research and then looking at the price.
2. Bill Gross
Bill Gross s the co-founder of one of the largest investment company PIMCO and has managed the world’s largest bond funds. Gross’s approach is more conviction-based, as he tells you that if you believe in a particular stock, then you shouldn’t diversify the portfolio. Rather you should commit as much as 10% of your portfolio to it. His primary area of focus is portfolio management.
Most millennials know the perils of parking all your funds in the same place, and as a general rule of thumb, tend to focus on portfolio diversification.
The rule itself is one of the most significant ways to minimize market volatility risk and impact. It also means that even though one of the stocks is performing well, you cannot ride its performance wave due to minimal returns. Making money in the market is about exhaustive research and about showing conviction in the stocks you think would do well.
3. Prince Alwaleed Bin Talal
You may never have heard of this prince, but the investing world sure does know about his wise decisions and cunning tactics to ruthlessly exploit the stock market. This investor from Saudi Arabia founded the Kingdom Holding Company. He earlier invested in Citigroup’s predecessor, Citicorp, in the early 1990s and has today become the bank’s largest shareholder. In addition to this, he has also invested in Twitter and Snap.
His modus operandi to navigate around the investment world is a classic case of patience. During the Great Recession, when many of his investments took a hit, while others were notably selling Citi Stocks because it was under a lot of market pressure, Prince Alwaleed acted patiently. Instead of a hasty sale in the market, he decided to hold onto his investment, a sign of some of his greatest investments. It is this patience that has rewarded him today.
4. Carl Icahn
Unlike the other investors in the list, Carl Icahn is more of an activist investor and a contemporary corporate raider. He tries to buy large stakes to amass voting rights in companies and increases each stock’s shareholder value. Some of his holdings include Time Warner, Yahoo, Clorox, Blockbuster Video.
Carl Icahn’s skeptical and cynical approach has invited praise as well as flak over the years. Although his opinions about interpersonal relationships in the stock market are subject to individual opinion, there is still something we can learn from his ways.
The exhaustive market research you do must be based on your research, and only by acting upon cogent facts, not opinions, from trusted sources can you determine what type of buyer behavior this will trigger. This is because market opinions and friendly advice may sometimes turn the other way round, and you might end up losing all your funds.
5. Carlos Slim Helu
Carlos Slim Helu currently owns hundreds of companies with an employee base of more than 250,000. Like all successful investors, Carlos doesn’t focus on the now and today. Instead, he tends to focus on the trends and tries to understand the momentum of the company. Understanding the momentum and the economy is the only way to move towards sound investment strategies.
According to him, an investor should always be forward-thinking and invest now on what ought to happen in the future. A great way to maximize returns is to anchor your investment with firms that have a sound track record and would do well in the future. This, however, does not mean that you abandon your search for the next big winner.
It is not just important to do exhaustive market research before investing in the market, but also to believe in that research. As a general caveat, market research before investment must not analyze newspaper reports or magazine article trends. Instead, you should base your long-term investment decisions on financial statements and management changes that drive success in the market.