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Everything in life is not luck, so let us take a cue from the successful

Everyone interested in investing in stocks, I guess, has at least heard of him. Author of books and "teacher" of the next generations of financiers. Benjamin Graham is one of the most successful professional investors, a researcher of financial markets, and a lecturer at Columbia University. Graham was the first to clearly distinguish investing from speculating. It defines investments as stock market operations carried out based on detailed analysis, from which a satisfactorily high return can be expected at a low level of risk.  Any other way of trading, according to him, is speculative. He has indeed left many materials with which we can gain knowledge. But certainly, his principles are intriguing and qualitatively oriented. Principle No. 1 Always invest within safe limits This is a principle for buying a stock at a significant discount from its intrinsic value, which assumes that, in addition to bringing a high return, it also minimizes risk. This concept is critical for investors to note: value buying can provide significant gains after the market inevitably revalues the stock and raises it to its fair value. It also offers protection against negative outcomes, should the business experience a significant decline. Principle #2 Expect volatility and profit from it Investing in stocks means dealing with volatility. Instead of fleeing the market during turmoil, the smart investor welcomes corrections as a chance to find excellent buying opportunities. Use market corrections to find good deals or take profits when investments become too overvalued. And remember, Graham's philosophy was, first and foremost, to protect capital and then try to grow it. Principle #3 Know what kind of investor you are. Graham advises every investor to know themselves. To illustrate this, he makes a clear distinction between the different groups operating in the stock market: speculators vs. investors. Not all people in the market are investors. Graham believed that it was very important for everyone to determine whether they were an investor or a speculator. The difference is simple: the investor views the stock as part of a business, and the shareholder is the owner of that business, while the speculator views himself as a player in expensive securities with no intrinsic value. Look in the mirror and ask yourself this question. Am I a speculator or an investor? If you feel like an investor, you are likely to stay longer in the stock market. This is due to your belief that the stock market can provide you with a stable income. If you feel like a speculator, you are much more likely to beat the market than an investor. However, life is not without its challenges. As a speculator, you will pay many more fees. Load frequent purchases and sales. The probability of hitting a mine under your feet increases. Everything in life is not luck.

Author Sezgin Ismailov

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