How many people do you know who have become rich in savings? There is a thin line between savings and investment. You save to reach your financial goals, but you invest to generate wealth. Investing requires time, patience, strategy, trust, research, and balance. The Motley Fool team shared some interesting investment secrets on LinkedIn. Here are three secrets to investing in the creation of wealth.
1% make decisions and 99% wait patiently for investment
It only takes a few hours to read and study stocks. But to give you a decent return, stocks take at least five years.What do you think Warren Buffett Did you make his wealth? He waited patiently for all the stock he bought. Think of it as a child. Infants cannot start solving e = mc2 at the age of two. And even if the toddlers are geniuses, they need at least 10 years to reach that equation.
One stock that can reward you for your patience Magna International (TSX: MG)(NYSE: MGA).. Four of the last five years haven’t been very rewarding (a 25% surge between June 2016 and June 2020). But the wait is over as stocks climb the ladder behind the electric vehicle (EV) revolution. It has surged 25% in the last 12 months. This means that one year covered four years of growth.
And stocks still have growth potential. As the global economy resumes, carbon emission standards set by China, the United States, and Europe are expected to boost EV sales. These countries are serious about reducing CO2 emissions by 2030. According to the Environmental Protection Agency, transportation is the main source of greenhouse gas emissions. report.. Therefore, EV makers can see a surge in demand.
Magna Sweet spot Here, we provide third-party manufacturing to 23 of the top 25 EV manufacturers. Sadly, Tesla Although not included in the 23 customers, Magna supplies components to Tesla. There may be a period of slowdown, but waiting can be rewarded for stocks on the brink of a revolution.
Most of the returns in your life come from just a small part of the investment you make
Keeping the first secret, don’t hit yourself if 3 out of 5 stocks underperform. It is normal. It’s the 80:20 principle: 80% of your returns come from 20% of the investment you make. Warren Buffett, for example, swims in billions of dollars of treasure he has invested in. Apple..
Therefore, it is essential to have a diverse portfolio. All you need is one future Apple in your portfolio. By the way, Magna is looking at the possibility of making an Apple car in the future.
Bad news in the short term does not prevent good returns in the long term
The third and most important investment secret is to see a larger long-term picture. Short-term noise does not affect the long-term profits of stocks. The March 2020 market crash has taught us new lessons. Every crisis brings an opportunity. Those who bought Magna shares in the March crash are enjoying growth of about 150%.
The bad news disappears over time, and fundamentally strong stocks rise like phoenixes. This is the math of a recovery rally. If Stock A, which trades at $ 10, drops to $ 5, it will drop by 50%. But when it soars to $ 10, it’s a 100% jump. Please do not sell in a hurry. Hold your stock with thick and thin ones. Over time, your investment will make you rich.
Here are some better-studied strains for the creation of wealth.
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This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own treatises, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..
Stupid contributor Puja Tayal There are no positions in any of the listed stocks. Motley Fool owns and recommends shares in Apple and Tesla. Motley Fool recommends Magna Int’l and recommends the following options: The March 2023 long call is $ 120 for Apple, and the March 2023 short call is $ 130 for Apple.
Three investment secrets to get rich
https://www.fool.ca/2021/06/21/3-investing-secrets-to-grow-rich/ Three investment secrets to get rich