Invest like Warren Buffet

Stock market got you stressed? We don’t blame you. With so much uncertainty and conflicting advice, the idea of investing sometimes isn’t very appealing. But, there is one man who seems to have the hang of it. Self-made billionaire Warren Buffet says we actually shouldn’t be too concerned about stock market fluctuations. We just have to be comfortable with them. 

The Berkshire Hathaway Chief Executive addressed the company’s shareholders in 2020 and stated, "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.” 

And he must know what he’s talking about. At 91 years old, Buffet is worth $US109.2 billion and earned the title “The Greatest Investor in the World”. The title rings true when you consider that, of the world’s top 10 billionaires (at the time of writing, Buffet is number 5), Buffet is the only one to have continued to gain wealth in 2022 (according to Bloomberg Billionaires Index). 

So, what can we learn from Buffet? 

1. Think ahead. 

Way ahead. When Buffet buys stocks, he’s making a long-term commitment. You need patience and the knowledge that the investment will likely be a very slow burn. 

2. Stick with what you know. 

Buffet has famously instructed, “never invest in a business you cannot understand”. We think that seems like good advice. When you don’t understand the business you’re investing in, you’re essentially going in blind and taking an unnecessary risk. Stay within your circle of competence, and if you want to branch out, don’t step outside the circle. Bring your new investment opportunity into it. 

3. Go with the good ones. 

When Buffet looks at the stock market, he sees companies, not stocks. He chooses the “good” ones — companies with a strong, sustainable, long-term business model. Do your research and opt for companies less likely to succumb to the usual market pressures their competitors might fall to. 

4. Educate yourself. 

Always keep learning. Even at 91, Buffet preaches the importance of ongoing education and being a “lifelong learner”. When it comes to investments and the stock market, read (and read and read — Buffet once said he reads 500 pages a week!), research, meet with financial advisors and successful investors, and keep up with stock changes. The more you know, the more likely you are to succeed. 

Plan ahead. 

We can’t put you in touch with Warren Buffet, but we can link you with some incredibly clever financial advisors who can guide you on sound investments. Contact us to talk about this in more detail — we’d love to set you up for stock market success.