Sharing investing advice for the long term, Tesla CEO Elon Musk wrote on Twitter: "Don’t panic when the market does."
The world's richest man wrote he has been asked a lot about how to invest and which companies should one invest in.
Musk advises: "Buy stock in several companies that make products and services that you believe in." He also said when to sell: "Only sell if you think their products and services are trending worse. This will serve you well in the long-term."
Musk's advice is in line with what one of the greatest investors of all time Warren Buffett has said "Be fearful when others are greedy. Be greedy when others are fearful."
Buffett, too, has said that one should understand a company's product before investing in it. "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years," Buffett has said.
His other quote also highlights the importance of understanding the business before investing. “Never invest in a business you cannot understand,” Buffett says.
Many people share their investment tips on social media which may be confusing at times. However, there are a few basic rules, such as investing in quality stocks with healthy fundamentals, keeping a stop loss, understanding the risk factor, and tracking the assets' performance, are some of the key rules that one must follow in investing.
Also, patience is really important for creating wealth through investment. Even though it is not quick money like in short term investing, the wealth generated after a long term will be more. However, patience should not mean inactiveness. If you understand the market cycle, are aware of the macroeconomic conditions and have a detailed knowledge of the stock's fundamentals, patience can work wonders.