Best Money Tips, Great Investment Tips Ever. (2nd set)

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Be on the lookout for opportunities

Focus on opportunities that are going to come to the table -- because prices are low, whether it's in the market, distressed debt, a foreclosed home, or a business.
-Robert L. Johnson

Bet on stocks to beat bonds

One thing I see with our clients and individual investors is an aversion to risk, and a favoring of fixed-income funds and Treasuries. In the past 20 years, we've been in an environment that's been good to bonds relative to stocks. But it's rare for that to happen over an extended period -- and the last two times it happened, the subsequent five-year period favored stocks.
-Liz Ann Sonders

When you invest, focus on price

Always remember that price is the most important aspect of an investment. Today we keep hearing people talk about "toxic paper" on bank balance sheets. Well, it's toxic to the banks because they paid 100¢ on the dollar for it. To somebody who gets to buy it at 30¢ or 40¢ on the dollar, it's not toxic at all. So there is no such thing as a toxic asset. There's no such thing as a damaged property. There is only a bad price.
-Barry Ritholtz

Get involved and network

Become deeply engaged in civic, professional, and educational organizations that matter to you. And constantly build new relationships with people through these affiliations.
-John Challenger

Create your own safety net

Every retiree and pre-retiree should have a retirement income plan in place that incorporates a realistic estimate of anticipated expenses. And if possible, your essential expenses, including health insurance, should be covered by reliable sources of lifetime income such as Social Security, pensions, and perhaps certain types of guaranteed income or sustainable withdrawals from savings.
-Abigail Johnson

Take a long view on the economy

Most of Wall Street is focused on next month's numbers, but by taking a long-term view on economic statistics and investment fundamentals, you stand a better chance of not getting whipsawed by the volatile economy.
-Bill Gross

Listen to what this wise man has to say
Fear is your friend.

The past two years were an "ideal period" for value-minded investors. For example, Buffett managed to scoop up bargains ranging from municipal bonds to securities of Goldman Sachs, GE, and others. "When it's raining gold," he writes, "reach for a bucket, not a thimble."

Focus on the (really) long term.

Buffett notes the investments that he and partner Charlie Munger prefer are "businesses whose profit picture for decades to come seems reasonably predictable." Not the next two months or quarters or years, mind you. Decades.

Stick with what you know.

Against the advice of the firm's managers, Buffett pushed Geico -- the home and auto insurer that Berkshire owns -- into the crowded credit card business several years ago. Geico bailed out in 2009, losing about $50 million in all. The moral: If you don't understand that commodity ETF your pal is bragging about, pass on it.

Maintain a cushion.

While firms were fighting for their lives in the credit crisis, Berkshire kept doing deals. Why? Because Buffett keeps about $20 billion in cash on hand. This reserve is earning "a pittance," he says. "But we sleep well." A reserve will help you sleep better too, especially as you near retirement.

The buck stops with you.

Buffett oversees virtually all derivatives contracts on the company's books. "If Berkshire ever gets in trouble, it will be my fault." You need to adopt the same attitude. Whether you go it alone or work with an adviser, understand the level of risk you're assuming. If something goes wrong, you'll suffer the consequences.

-Warren Buffett

To be continued...

Image source: flickrr
Article source: cnn.com