We adhere to strict standards of editorial integrity to help you make decisions with confidence. Some or all links contained within this article are paid links.
Warren Buffett is well known for his buy-and-hold investing strategy, and making solid bets on low-performing stocks when others are selling at a loss.
At his company’s annual meetings, Berkshire Hathaway’s shareholders have the opportunity to pick Buffett’s brain on any number of topics.
Don’t miss
-
Accredited investors can become the landlord of Walmart, Whole Foods or Kroger — and benefit from regular distributions without lifting a finger. Here’s how
-
Car insurance premiums in America are through the roof — and only getting worse. But less than 2 minutes can save you more than $600/year
-
These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes. Here’s how
One investor who attended the conference in 1999 cut right to the chase in a memorable way. “Mr. Buffett, how do I make $30 billion?” he asked.
As always, the Oracle of Omaha conveyed complicated theories in simple terms — rules that can guide any investor.
If you want to learn the ropes that helped the 93-year-old accumulate a massive fortune, here are a few of his fundamental rules to consider.
Circle of competency
Tom Watson Sr., the founder of IBM (NYSE:IBM), once said, “I’m no genius. I’m smart in spots — but I stay around those spots.” That’s the mantra Buffett has applied to his investing, too.
By focusing on industries he understands and avoiding temptation to chase trends, Buffett has built his fortune through a disciplined and patient approach.
His strategy, however, comes with an important caveat: volatility. At the 2020 Berkshire Hathaway shareholder meeting, Buffett reminded investors of the inevitable ups and downs.
“You’ve got to be prepared, when you buy a stock, to have it go down 50% — or more — and be comfortable with it, as long as you’re comfortable with the holding,” he said.
You can build your own circle of competency with trusted advisors who bring their expertise on growing wealth — and Advisor.com can help you find a financial professional that’s right for you.
Advisor.com is a free online platform that connects you with vetted financial advisors. Just answer a few quick questions about yourself and your finances, and the platform will match you with experienced financial professionals best suited to help you develop a plan to achieve your financial goals.
You can view the advisors’ profiles, read past client reviews, and schedule an initial consultation for free with no obligation to hire. There is also an accessible family office option for established investors with larger portfolios.
Arta Finance is a digital wealth management service that offers exclusive financial strategies, primarily serving affluent individuals and accredited investors. One of their aims is to democratize access to sophisticated investment strategies traditionally available only to ultra-high-net-worth clients.
Arta provides a range of services, including investment in alternative assets, personalized portfolio management and financial planning, diversified portfolio building and tax strategy, all aimed at supporting your long term financial growth.
Read more: Lock in juicy quarterly income through this $1B private real estate fund — even if you’re not a millionaire. Here’s how to get started with as little as $10
Start young
Buffett’s best advice for investors is to get started as early as possible. He has a simple metaphor to explain his wealth-building strategy.
“We started with a little snowball on top of a very tall hill,” he said. “We started at a very early age in rolling the snowball down, and of course, the nature of compound interest is that it behaves like a snowball.”
Indeed, the length of Buffett’s career is a key piece of his enormous wealth. He bought his first stock at the age of 11. He’s now 93 years old and still actively investing.
In fact, the majority of Buffett’s wealth was accumulated after he turned 65. In 1999, his net worth was just $30 billion. Today, it’s nearly four times greater at $116 billion, as per Bloomberg.
Ordinary investors can best harness the power of compounding by starting as early as possible. A great way to start your own snowball rolling is with Acorns, an automated savings and investment app that makes your spare change go to work for you.
When you make a purchase on your credit or debit card, Acorns automatically rounds up the price to the nearest dollar and places the excess into a smart investment portfolio. Plus, Acorns lets you customize how you save and invest.
With an Acorns Silver plan, you get access to Acorns Later, a retirement investment account with a 1% IRA match on new contributions. With Acorns Gold, you get a 3% IRA match on new contributions and the ability to customize your portfolio by selecting your own stocks.
Plus, if you sign up today, you can receive a $20 bonus investment.
Search for small companies
Buffett once said that if he were starting again today with $10,000, he would focus first on small businesses. “I probably would be focusing on smaller companies because I would be working with smaller sums, and there’s more chance that something is overlooked in that arena,” he said at the shareholder meeting.
In his early days, the billionaire investor focused on extremely small companies that would be considered small-caps. He bought a tiny furniture company in Nebraska in 1983 when it was still expanding across state lines. He acquired See’s Candies when it made just $4 million in annual profits in 1972.
These small businesses were overlooked and had more room to grow. That means Buffett had a chance to buy them cheap and watch them expand.
This is also true now. Small-cap stocks were roughly 30% cheaper than large-cap ones in the final quarter of 2023, according to analysis by BNP Paribas. They have also historically outperformed large caps, especially after recessions and over longer periods of time, reports MSCI.
Need more in-depth guidance on which small cap stocks to bet on?
The team of former hedge fund analysts and experts at Moby spend hundreds of hours each week sifting through financial news and data to provide top-tier stock and crypto reports to keep you up-to-date on what’s moving the markets.
Moby’s superior research can help you reduce the guesswork when selecting stocks and ETFs.
In four years, across almost 400 stock picks, Moby’s recommendations have beaten the S&P 500 by almost 12%, on average.
With their easy-to-understand formats, you can become a wiser investor in just five minutes, and make some investments that even Buffett would approve of.
Once you’ve done your research, building and managing your portfolio efficiently is key, and that’s where Public comes in.
Regardless of your current net worth, Public makes investing in small or large companies easy.
Public not only offers commission-free trading, but also provides a [high-yield cash account offering 4.1% APY]https://moneywise.com/c/1/144/656?placement=11), where you can park your cash between investments.
Public also has social features, enabling users to follow and learn from other investors, share ideas, and stay updated on market trends with real-time insights — kind of like your own circle of advisors, which Buffett famously relies on.
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
