Warren Buffett

Here's an easy investing lesson that could spare you big losses. Warren Buffett has made billions in the stock market. And while his investing experience is ...

Buy and hold stocks you know. If you intend to hold a stock long term, you don't have to change your plans when temporary conditions push the stock price down. That's understandable -- you don't have the resources Buffett has. That's why you'll often see him increase his buying activity when the market is down. As a result, you can more easily identify threats and assess the company's growth plans. You can sell the stock for less than you'd expected. There are two components to investment profits -- your buy price and your sell price. While many investors focus on the sell price, Buffett does the opposite. This is another way of saying invest in what you know. If stocks rise to the point of being overvalued, a big correction may follow. Avoid the "can't-lose" mindset. Use his advice to minimize ugly investing surprises and maximize long-term returns.