Which stock market investing strategy is the best for you? Buffett‘s great businesses, Lynch’s 100% invested all the time and high trading or Dalio’s All-Weather portfolio.
Warren Buffett, Ray Dalio Or Peter Lynch Investing Style
Third Point's Dan Loeb discusses their new positions in a letter to investor reviewed by ValueWalk. Stay tuned for more coverage. Loeb notes some new purchases as follows: Third Point’s investment in Grab is an excellent example of our ability to “lifecycle invest” by being a thought and financial partner from growth capital stages to Read More
Good day fellow investors. Who is the best investor Warren Buffett, Ray Dalio or Peter Lynch? Or better to say what investment styles among those free better fits your investing style. Those are all great investors. Among the probably the top three in the world. So we have to see which of their investment styles better fits your investment strategy style risk reward appetite et cetera. So in this video give you an overview of each of those investment styles. And at the end I want to hear in the comments which one best fits you and you will find a way to better position yourself your portfolio and what best works for you.
We'll discuss radios investing style whether portfolio Warren Buffett's investing style buying great businesses Peter Lynch's investing style buying or earnings trading and the always 100 percent invested. So let's start with Ray Dalio. He's famous for his old weather portfolio where owning various asset classes allows him to earn the yield on those that don't produce and be very well diversified at all times no matter what happens in the economy. Additionally by selling part of those assets that increase in value and buying more of those that decline thus by balancing one's portfolio exposure the investment return increases. The goal is to be diversified across various asset classes so that you can do relatively well no matter what happens in the economy. If gold goes up you sell a little bit you buy more of what went down or has seen the portfolio exposure decline seems easy. Any textually s is easy but there is one thing many get wrong. Ray Dalio delivered an average return of 10 percent for his Bridgwater funds over the last 30 years and people expect that they can do the same with their or whether portfolios. Well forget about it. Dalio did really well but he's invested in over 150 countries 20 asset classes derivatives options whatever you can imagine leveraged hedge all of faith. So he has 1500 people working and researching for him. So no individual can copy that. All you can do is you can have a simple or whether portfolio and then expect okay bonce will give me a free percent 4 percent 5 percent with the rebalancing. So a return over the long term from stocks in this 2 percent the little bit the four innings between 5 and 7 percent from an all weather portfolio. And yes you will lose money when there is a crash but you will lose much less. For example if you have 40 percent in stocks when the stock market crashes 50 percent you will lose just 15 percent not 50 or 60 percent like someone who is 100 percent in stocks but you will miss out on the upside too. So we can conclude that the all weather portfolio is someone who likes slow and steady who doesn't like volatility which is not risk. It's just you don't like to see or value the value of your portfolio go up and down because you don't like that your sacrifice. You buy bonds you buy gold. That is not producing anything you buy commodities and you rebalance your portfolio every quarter twice a year and put it there.
Enjoy you whatever happens you don't have to worry about anything. And that returns smaller will compound over time. So that's Ray Day. And that is what people have to understand from him. No let's go onto Buffett.
Warren Buffett's investing strategy we can summarize it in three points. Don't lose money. Always by value. No matter what. Try to get value at a fair price or even cheaper price let your investment returns compound in the form of dividends and high returns on invested capital. There is a complete playlist going through Buffett's investing mindset in letters to shareholders on my YouTube channel. So if you enjoy his investment style you can find much much more great content there. A key point is that Buffett likes to wait with cash for a big opportunity. In good economic times times Buffett likes to accumulate cash that he consequently deploys when there is blood on the streets like he did in 1999 2005 to 2007 and he has been accumulating cash since 2008 14 waiting for opportunities.
So we have Dalio that's really focused on the macroeconomics what's going on in the world asset classes then we have Buffett who looks at recession cycles who waits for Blood on the street to make his big purchases to use his elephant gun as he likes to call it and then.