Invest Like the Best: Three Pro Tips from Famed Investors Ray Dalio, Warren Buffett, and Michael Burry

Investing experts and laypeople alike often lament the unpredictability of the securities market—financial markets on which investments like stocks and bonds are sold. However, according to one of the world’s leading investors, Howard Marks, this belief in the market’s unpredictability is unfounded. In Mastering the Market Cycle, he argues that the securities market fluctuates predictably based on recurring business cycles and patterns in investor psychology.

In this guide, we’ll begin by discussing the foundational cycles—the economic cycle, the profit cycle, and the credit cycle—that shape the investing landscape and impact the securities market. Then, we’ll turn to the psychological cycles that arise from these business cycles, examining how investors swing between greed and fear and between risk tolerance and risk aversion. Finally, we’ll discuss how these cycles influence the overall securities market cycle and how understanding the securities market is crucial to earning above-market returns.

A massive bestseller now in its 12th edition, Burton Malkiel’s A Random Walk Down Wall Street provides a comprehensive and entertaining introduction to the world of finance. Malkiel leverages his experience as an academic economist and former Wall Street portfolio manager to explain for the lay reader the intricacies of security analysis, asset valuation, and investment theory. He also offers a wealth of practical investment principles that will be useful for novice and seasoned investors alike.

In Money: Master the Game, motivational speaker and life coach Tony Robbins argues that anyone can master money, achieve financial well-being, and create their dream lifestyle. In Robbins’ view, to master money means building an investing strategy that yields passive income for life and gives you the choice of when, where, and whether to continue working. Conversely, neglecting to master money means that you’ll always need to trade your time for money.

Our guide unpacks Robbins’s approach to changing your money mindset and financial strategy, and we contrast it with popular approaches to financial independence such as Financial Independence Retire Early (FIRE) and Early Retirement Extreme (ERE).

With various companies vying to manage investors’ money, investing can feel overwhelming. John Bogle, however, argues that the winning strategy for novice investors is simple: Invest in traditional index funds and hold them indefinitely.

In his 2017 book, The Little Book of Common Sense Investing, Bogle outlines the reasons why investors typically make more money with index funds than the primary alternative—actively managed mutual funds. Because the costs of mutual funds vastly outstrip those of index funds, Bogle argues that mutual funds deliver reduced returns, and those relative losses compound over time.

In this guide, we’ll discuss Bogle’s arguments about the superiority of index funds over mutual funds, in addition to his proposed allocation of stocks to bonds in your portfolio. We’ll also dig deeper into the data that underlie Bogle’s arguments and examine how the book’s predictions have panned out since its publication.

A massive bestseller now in its 12th edition, Burton Malkiel’s A Random Walk Down Wall Street provides a comprehensive and entertaining introduction to the world of finance. Malkiel leverages his experience as an academic economist and former Wall Street portfolio manager to explain for the lay reader the intricacies of security analysis, asset valuation, and investment theory. He also offers a wealth of practical investment principles that will be useful for novice and seasoned investors alike.

In The Simple Path to Wealth, blogger and financial expert JL Collins offers a simple road map to achieving financial independence and a secure retirement: Spend less than you make, avoid debt, save “F-You Money,” and invest in stock index funds. He demystifies stocks and bonds, as well as a plethora of investment plan options. In addition to explaining basic concepts such as asset allocation, Collins answers key questions such as how to live on your investments and how to avoid major tax hits.

Whether you’re in the wealth accumulation stage of life where you’re growing your investments, or in the wealth preservation stage where you’re living on them, Collins tells you how to use your money to achieve freedom and a more fulfilling life.

The Big Short: Inside the Doomsday Machine takes us inside the madness, corruption, and greed at the heart of the 2007-2008 financial crisis. It tells the story of an eccentric collection of investors who saw the folly of the subprime mortgage-backed securities market—and found a way to bet against it. By focusing on individuals who saw these worthless securities for what they truly were, The Big Short explores the complexities and irrationalities of modern capitalism and forces us to seriously question the wisdom (and motivations) of the financial elites who wield so much power over our economy, society, and politics.

Investing experts and laypeople alike often lament the unpredictability of the securities market—financial markets on which investments like stocks and bonds are sold. However, according to one of the world’s leading investors, Howard Marks, this belief in the market’s unpredictability is unfounded. In Mastering the Market Cycle, he argues that the securities market fluctuates predictably based on recurring business cycles and patterns in investor psychology.

In this guide, we’ll begin by discussing the foundational cycles—the economic cycle, the profit cycle, and the credit cycle—that shape the investing landscape and impact the securities market. Then, we’ll turn to the psychological cycles that arise from these business cycles, examining how investors swing between greed and fear and between risk tolerance and risk aversion. Finally, we’ll discuss how these cycles influence the overall securities market cycle and how understanding the securities market is crucial to earning above-market returns.

To the outsider, the world of investing can seem daunting to enter—if not outright impossible. But according to investment professional Howard Marks, anyone can learn the basics needed to invest successfully.

In his 2011 book The Most Important Thing, Marks outlines the key tenets of his approach to investing. He argues that the best approach for investors is value investing, which involves determining securities’ intrinsic value and purchasing below it. To practice it successfully, you must learn the nature of market cycles to find opportunities for purchasing mispriced securities, while also learning how to mitigate the risk entailed by investing.

In this guide, we’ll outline the fundamentals of value investing, discuss market cycles and how they’re useful to the value investor, and analyze the common mistakes that often leave investors exposed to unnecessary risk. Throughout the guide, we’ll also examine recommendations from other investors that supplement—and occasionally challenge—Marks’s investing wisdom.