At this time of year, many people are thinking about entering the stock market, or perhaps reviewing their existing stock portfolio.

You don’t need to have a lot of money to start investing. However, whether investing with a few hundred pounds or billions, many of the world’s great investors over the centuries (such as Warren Buffett and George Soros) have tended to follow certain rules.

Finding great companies is really significant

Many people invest money in the stock market because they believe the company is worth more than its current share price suggests. There is logic in this. However, this approach may miss one key element of long-term investing: investing money in brilliant, not just good, companies.

Buying a great business at a good price may be better in the long run than investing in a merely decent business at a great price. The latter solution is essentially a one-time move based on a perceived mismatch between the current share price and the actual value of that share.

However, the approach of identifying brilliant companies is based on the insight that a truly great company should hopefully continue to generate value in the long run

Being patient

With money sitting idle in an ISA, it can be tempting to invest in the first decent idea that comes your way. However, brilliant investors are often willing to sit on money for years or even decades before they start taking it to the stock market. Once they buy shares, they sometimes hold them for decades.

As Buffett’s behind schedule partner, Charlie Munger, said:The large money is not in buying and selling, but in waiting“.

Building success on success

One reason why this long-term approach to investing can build wealth is that it can lend a hand create more capital, giving the investor further investment opportunities.

Buffett’s company Berkshire Hathaway it does not pay dividends even though it is extremely profitable. He prefers to reinvest profits in the development of his business.

In fact, the petite investor can also enhance his capital gains and dividends. Doing this in a Stocks and Shares ISA can be one way to have more money to invest in your ISA, while still staying within your contribution allowance.

Please note that tax treatment depends on each client’s individual situation and may change in the future. The content of this article is for informational purposes only. It is not intended to be and does not constitute any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

One dividend stock that I think investors should consider is FTSE100 asset manager M&G. The 39% share price rise over the last five years has helped shareholders build wealth, although it has fallen miniature of the FTSE 100 index’s gain of 52% over that period.

However, what M&G did much better than the UK’s flagship stock index was paying out passive income in the form of dividends. The FTSE 100 is currently yielding 3% and the M&G mergers are yielding well over twice that, at 7.1%.

The company also intends to enhance its dividend per share every year, which it has achieved over the past few years. Its business has significant cash generating potential to lend a hand achieve this goal with its robust brand, gigantic customer base and international reach.

But dividends are never guaranteed. One risk I see is that investors take more money out of M&G funds than they put in, which hurts fee income.

M&G has struggled with this issue in recent years and it remains risky. However, let’s hope that a positive performance in the first half in this respect bodes well for the coming years!