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3 Key Pieces of Advice from Warren Buffett

3 Key Pieces of Advice from Warren Buffett

November 10, 2022
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Warren Buffett is a self-made billionaire and the CEO of Berkshire Hathaway. Buffett amassed his wealth from his investing tactics and strategies. He has also been dubbed as one of the greatest investors of all time. However, he has used his success for good by offering up bountiful advice on investing. Continue reading for 3 key pieces of advice from Warren Buffett.

1. Don’t lose money. Warren Buffett’s #1 rule for investors.  Valuations matter, prices matter, risk tolerance, time horizon, & especially asset allocation matters.  Don’t get complacent about risk!

2. His rule #2….” Don’t forget rule #1”.

3. Continue Investing

As we’ve seen during the Covid-19 pandemic and in 2022, the economy and stock market has its ups and downs. The United States economy is cyclical; meaning there is a cycle of economic booms and recessions. Since 1949, the U.S. economy has experienced 11 recessions and has recovered from each one of them. While some news headlines may be alarming about the stock market declining, investing is still the best way to build wealth. Buffet explains that economic downturns offer up investing opportunities when stock prices dip. Set yourself up in a position to be able to purchase more stocks and invest more during recessions for a greater return. One of his popular quotes regarding these opportunities is, “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”

4. Investing is not all about intellect, but temperament

Buffett believes there is great value in temperament when investing. He is noted saying “You need a temperament that neither derives great pleasure from being with the crowd or against the crowd” in reference to investing. With social media and personal finance influencers, there are many different stocks and cryptocurrencies that you’re being told to invest in. One of the most recent ones was Dogecoin. Instead of going with the crowd, you should focus your investing decisions on what is going on in the market, and most importantly…..”the future of the markets”.  By focusing on the facts, future, and not on emotion or peer pressure, you can make sound investment choices.

While taking advice from the best of the best on investing can be beneficial, it’s helpful to have a knowledgeable financial advisor to execute on the investing advice. Our team at Abundance Wealth Solutions can manage your investments and retirement planning on your behalf, personalized to your goals. If you're looking for personal finance management, contact us today.

Sources:

https://www.bankrate.com/2020/08/21154001/Buffetts-best-investment-advice.jpeg?auto=webp optimize=high&crop=16:9&width=912

https://www.forbes.com/sites/johnwasik/2018/02/26/warren-buffetts-3-most-profitable-pieces-of-advice/?sh=8a5d34672302

https://www.thebalancemoney.com/the-history-of-recessions-in-the-united-states-3306011#:~:text=There%20have%20been%2011%20recessions,as%20long%20as%20a%20decade.

 

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