Stock Market Investing - How Can You Be As Successful As Warren Buffett?

Warren Buffett has become one of the richest men in the world thanks to years of successful investing

. It is no surprise that many people try to emulate his success. So what kind of things can you learn from Warren Buffett and his style of investing?

Well for a start you should appreciate how important it is that you find large companies that are market-leaders in their particular industry. Buffett always makes a point of finding the biggest and best companies because they are the ones most likely to grow their earnings and dividends in the years to come.

To demonstrate this point, he has invested in the UK biggest supermarket chain Tesco in recent years. This is a company that has grown it's dividends and earnings for many years now, and looks set to continue doing so in the future, so it should deliver excellent returns in the long run. It's certainly a safer and more productive strategy that investing your money into several high-risk stocks that could easily go bust at some point.

Another way you can emulate his success is to realize how important it is to be both patient and disciplined. You need so much patience to hold on to quality stocks for years and years, but this is exactly what Warren Buffett does, and he has made incredible returns as a result.

You should not worry about short-term market dips because in the long run the share price will always bounce back to represent fair value. In fact you can even use these dips to accumulate more shares for the long-term if the company in question is still expected to grow it's earnings.

Finally you should not view dividends as being a little bit of pocket money that you earn along the way. Providing you don't need the money, dividends should always be reinvested back into your stocks because this creates even more dividends in the future and also helps you to achieve even greater capital gains. The compounding effects of dividend reinvestment can be quite significant, as Warren Buffett has demonstrated himself over the years.

So the point I want to get across is that there is no reason why you can't follow in the footsteps of Warren Buffett and generate some real wealth from the stock market. It takes time, of course, if you do invest this way, but there are profits to be made if you are patient and concentrate on holding good quality stocks for many years to come.

by: John Robertson

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