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4 Ways Crowdfunding Can Make You a Better Investor -- Just Ask Buffett

Stocks in this article: FB NKE SHLD JCP KO WFC BRK.A BRK.B

3. Frankenberger: Manage risk

These advantages from crowdfunding allow for superior risk management, too, which is the critical factor according to Andy Frankenberger, who beat gambling legend Phil Ivey in the World Series of Poker in 2012.

Frankenberger, a former derivatives traded, stated about his victory, "It's all about risk management. If the market goes against you and you're wrong, you get out. A lot of poker players don't know how to do that because it looks weak."  

4. Einhorn: Start small

On the same note, Dom Einhorn, founder of crowdfunding platform Born2Invest, added, "While any early-stage investing, including crowdfunding, is risky, it is mitigated in crowdfunding because of the ability to allocate small amounts to specific ventures. This results in a front-row seat with limited financial exposure, allowing for gauging the viability of the project before committing larger funds."

All investing is about putting the odds in your favor.

Crowdfunding can improve the investing skills, and returns, of an individual investor. And those benefits can apply to the stock market too.

That's not arcane financial theory. It's the proven result of investing legends such as Peter Lynch and Warren Buffett.

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>>Read More: Microsoft Knows Where It Is Going, but Who Will Follow?

>>Read More: Foot Locker and Hewlett-Packard Lead 9 Stocks Pre-earnings

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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