Kevin O’Leary’s 5 Best Tips for Investors

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Kevin O’Leary has built his wealth through a combination of entrepreneurial pursuits and savvy investing. As for how he chooses where and how to invest, O’Leary sticks to a few tried-and-true rules of thumb.

Here are O’Leary’s best tips for investors.

Start Small and Invest for the Long Term

Even if you don’t have a ton of discretionary funds, you can still get started investing. The key is to start small and stay consistent over time, O’Leary said.

“Take $100 a week and invest it over the long period,” O’Leary said in a YouTube video. “The markets give you somewhere between a 6% and 8% return over long periods of time. [If] you take $100 a week and you start putting it into the stock market and letting it grow over 30, 40 years, if you do that and you have that discipline, you’ll end up a millionaire your 60s, where you really need to have some money to retire with. So I think that’s a pretty pragmatic strategy.”

Invest In High-Quality Versions of the Things You Love

O’Leary doesn’t believe you should deprive yourself of buying things you enjoy, but he believes in buying quality over quantity.

He gave the example of investing in quality clothes over fast fashion: “You have two options,” he said in the YouTube video. “You can buy a whole bunch of crap [or] you can start investing in pieces that are going to appreciate, that really mean something to you.”

This can apply to anything, from watches to guitars.

“You have to think pragmatically,” O’Leary said. “Buy less stuff, but when you buy stuff, make it good stuff, make it investable stuff, whether it be a watch, whether it be a guitar, even something like a ballpoint pen. You can spend 29 cents on a pen and throw it away or you can buy a collectible piece. You may say, ‘That’s trite and stupid.’ I don’t think so. It’s stylish. I love to use it. It’s functional, pragmatic, and it’s appreciating in value.”

Invest In Exchange-Traded Funds

In a segment of the YouTube video, a young woman asked O’Leary what she should do with $20,000 that she currently has in a bank account.

“You want to put that to work,” he said. “I prefer these days using ETFs — exchange-traded funds — and here’s why. These days most online brokers will let you set up an account, no fees, which is fantastic. ETFs are basically a basket of very short-term government bonds that yield about 1.9% to 2.1%. They’re transparent, they’re low fee, they’re very liquid — you can buy and sell them. I would buy something like the SPY, which is the entire market.”

Start Investing ASAP

Even if you’re decades away from retirement, the best time to start investing is now.

“Everybody loves to procrastinate,” O’Leary said in the video. “There’s always a reason not to do something — and it’s your enemy. When it comes to investing, you really want to get over that quickly because you need the time value of money to be on your side. So don’t procrastinate. Start investing.”

Once you start putting money into investments, don’t stop.

“Find a way to get disciplined, put some aside every week and let it grow for you,” O’Leary said. “It takes time, usually many, many years for investments to grow, and to build your wealth. So you’ve got to have a long-term strategy. Ideally, you would have started yesterday, but there’s no point in dwelling on the past. Let’s get started today. The most important step in the process is to make a commitment to yourself and your own future.”

Don’t Try To Time the Market

Whether the market is up or down, it’s important to keep investing consistently, O’Leary said.

“You can’t time the market,” he said in the YouTube video. “Sometimes the entire year’s return comes in just a few days. And if you’re not invested in those days, you miss out. You have to get used to volatility — the market going up and down. But don’t try and time it.”

O’Leary noted that historically, the markets have always gone up over time.

“Remember when the pandemic started, people panicked and markets dropped. Some people thought their investments were doomed. But what actually happened? The market came back as it’s done after every major drop in history,” he said. “Am I predicting what will happen tomorrow? No, absolutely not. Why? Because nobody knows. I don’t have a crystal ball and neither do other investors and financial advisors out there.

“The most important thing to remember is that investing is a long-term game,” O’Leary continued. “When I started putting money in the markets, I’d obsessively check my portfolio every hour until the closing bell rang. What a waste of time and energy. If you want your money to grow, you have to be in the markets consistently over time. Volatility, corrections and bear markets are all to be expected. If you look back at historical market data over the past few decades, you’ll see that the line isn’t straight but overall it does trend upwards.”

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