Stig Brodersen is the host and co-founder of “We Study Billionaires” by The Investor’s Podcast Network, the largest stock investing podcast show in the world with over 50 million downloads. Brodersen studied business analysis at Harvard University and is a former college professor. Before becoming an investor, he worked for one of Europe’s leading energy trading companies. Now, he creates educational finance content for The Investor’s Podcast Network community and runs the investment company Stig Brodersen Holding.
Recognized by GOBankingRates as one of Money’s Most Influential, here he shares why it’s so important to educate yourself before investing, how to invest for the long term and why investors need to keep their emotions in check.
What advice would you give your younger self about investing?
Start investing earlier. Investing isn’t just a question of putting aside money as early as possible and the compounding interest of your portfolio, but rather about the compounding interests of your investment knowledge. Start reading books as soon as possible, and learn from the people with the best track records, like Warren Buffett.
What is the best thing you did to boost your own portfolio?
The easiest answer would be to say: “Buying bitcoin,” but that wouldn’t be the whole story. As crazy as some of my returns have been on bitcoin and stocks, the best returns are when you pay $15 for a brilliant investment book. Or better yet, read Warren Buffett’s letters to his shareholders for free.
When it comes to investing for the long term, what should people focus on?
Do not dance in and out of your investments. I would recommend that you buy a well-diversified stock ETF. In times like these, when it looks like inflation is on the rise, you want to be well-diversified and protected against inflation. The track record of stocks is there for a reason since you buy into cash-producing assets. Another bonus is that you don’t have to be too concerned about the increasing disruption you see everywhere. You’ll invest in your fair share of winners.
What is the biggest mistake people make when it comes to investing?
The biggest mistake is that people don’t understand what they are investing in. Investing is by nature a volatile game, and if you don’t understand what you’re investing in, you don’t have any conviction. So when the market bottoms out as it did in March 2020 you will likely make the wrong decision. Most people sell when it’s time to buy and buy when it’s time to sell. Keeping your emotions in check and understanding how you react when markets turn sour is more important than most investors think.
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Jaime Catmull contributed to the reporting for this article.
Last updated: April 21, 2021
This article originally appeared on GOBankingRates.com: We Study Billionaires Host Stig Brodersen Says This Investment Will Give You the Best Returns