Do not think that you can buy the lowest and sell the highest

Let’s say you start by investing $10,000 in the stockmarket and achieve an annual compound return of 30%. At the end of 10 years you will have a tidy sum of $138,000. Of course, if you were the average investor, you would probably think returns of 30% in the stock market are impossible over a long period of time.
Well, when you read about Warren Buffett you will see that he has been averaging around 30% in the stock market not for 10 years, but for 47 years! Not only that, he has been doing it with conservative, long-term investing.
Many people have tried to study Buffett’s investment techniques in detail. While Warren Buffett has written extensively on his general principles and methods, he has written almost nothing about the specific details. To invest successfully over the long term, it is imperative that we understand some of the key principles of long term investment through the experience of “the world’s greatest investor”.