Whether you have been in the investing world long or not, it is very likely you’ve heard of Warren Buffet. A top dog in finance of all sorts, he is one of the five most wealthiest people in the world.
Often referred to as the world’s greatest investor, his long-term track record suggests that title is well deserved! Investors and the business world alike have been seeking his advice for decades, so here we have picked our favourite moments of his wisdom:
“Try to be fearful when others are greedy and greedy only when others are fearful.”
Probably the most famous Buffett-ism, this quote is essentially another way of phrasing the popular investing maxim, “Buy low; sell high.” Investors frequently do the opposite because of herd mentality; our psychological desire to follow the crowd. But being a contrarian can be much savvier. For example, when current events scare investors away from a down market, you might use that opportunity to buy quality stocks on sale.
“Both large and small investors should stick with low-cost index funds.”
Buffett may be a brilliant stock picker, but he still recognises the strength of simple investing with a low-cost S&P 500 index fund.
In 2007, Buffett bet a New York hedge fund $1 million that his simple, low-cost investing strategy would outperform the hedge fund industry over 10 years. And he won.
“The investor of today does not profit from yesterday’s growth.”
This oldie but goodie reminds us that past performance is no guarantee of future results, so you can’t count on a hot investment continuing its streak. Instead, look to the future. Be sure any investment you’re interested in has good prospects and can help you reach your goals.
“Our favorite holding period is forever.”
Of course, Buffett doesn’t really expect anyone to hold onto an investment forever. His point is that you should “buy into a company because you want to own it, not because you want the stock to go up,” as he put it to Forbes magazine in 1974. That means if you’re trying to invest in individual stocks, you look for good businesses you believe can be profitable for the long haul. Then you’ll only sell when you need the cash, not because it’s time to unload a dud.
“Anything can happen anytime in markets… Market forecasters will fill your ear but will never fill your wallet.”
Listen to Warren: Ignore the noise—especially given today’s media landscape, where we have constant access to information, and every minor event stands a chance at making headlines and moving the market (at least in the short term).
In the end, as long are you’re confident in your plan and portfolio, this shouldn’t change your long-term investing strategy! Like the Raiz philosophy to invest small amounts regularly, even in falling markets, this can help you to ride out the downturns in the market and is one of the keys to having a healthier balance over the long run.
*This article is provided for informational and educational purposes only. Information on our website is general advice only and does not take into account any person’s individual objectives, financial situation or needs. Before acting on anything on this website you should consider its appropriateness to you, having regard to your objectives, financial situation and needs.