Jan 31, 2025
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Warren Buffett is one of the greatest investors of all time. So, if you follow his moves by buying what he buys and selling what he sells, that’s a recipe for investing success, right?
Copycat investing sounds good in theory. Buffett even admitted in a 2009 Berkshire Hathaway Annual Meeting, “I did the same thing when I was young.” However, the Wizard of Omaha offered a word of warning as well. "You can piggyback on my moves, but you can't buy the whole businesses I do."
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The problem is that most Americans don’t have the means to buy entire businesses in the way that Buffett can, and that means they don’t have the same control over the outcomes.
That’s just one reason why buying like Buffett looks a lot better on the surface than it is. But it certainly doesn’t mean you need to have Berkshire Hathaway’s amount of capital to become a successful investor. Below are four Buffett-backed tips for growing your wealth as an individual investor.
Start when you can
It’s all about starting small. The sooner you start investing, the better, no matter how much you’re setting aside. That’s because one of Buffett’s core principles, compounding, ensures you earn returns on both your initial investment and the growth it generates. For instance, investing $100 per month at a 5% annual compound rate would grow to $15,593 over 10 years.
If you’re struggling to find the extra cash to invest, platforms like Acorns can simplify investing by building a long-term portfolio for you using your spare change.
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Invest for the long-run
Instead of trying to beat the market and constantly changing your investments, another tried-and-true Buffett approach is to pick solid investments and then leave them alone.
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In 1998, Buffett shared his belief that investors should “only buy something that you'd be perfectly happy to hold if the market shut down for ten years.” Data from Finimize also proves that in general, the longer your investment horizon is, the less likely you are to suffer a loss.
If you have a long-term goal in mind for your investments, working with a financial advisor can help you make a concrete plan to get there.
Vanguard offers a hybrid advisory service that combines professional advice and automated portfolio management to ensure your investments are working toward your long-term objectives.
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With a minimum portfolio size of $50,000, Vanguard caters to investors with established portfolios who want to grow their wealth with a mix of strategies.
Research, but don’t copy
Another issue with trying to follow Buffett’s trades is that the stock market moves quickly. In the 1960s, when Buffett was in his 20s (and perhaps still copy trading), the average stock-holding period was between seven and eight years. Now, it’s less than a year long, on average. And given the Securities Exchange Commission (SEC) only requires institutional investors to disclose their holdings quarterly, you’d often be several months behind his actual trades.
This delay can lead to serious risks. That’s why it’s important you stick to industries or businesses you understand rather than following blindly.
Tools like Public allow you to invest while learning from a community of fellow investors who post their insights on a wide range of stocks.
Public’s social investing platform democratizes access to investing by offering commission-free trades on stocks, ETFs, treasuries, and alternative assets. They also offer a high-yield cash account with a competitive interest rate for any of your uninvested funds.
Gemma Lewis is a freelance contributor with her CFA UK Certificate in Investment Management. She has navigated the ever-evolving world of financial technology as both a product manager and investment analyst, having earned her Master’s of Business from the University of St Andrews, and Bachelor of Commerce from McGill University. Her writing and commentary has been featured across top-tier publications, including Forbes, the BBC, Financial Times, Telegraph, Yahoo!, Motley Fool, and Fortune. If she's not writing, she's either reading, or running around and exploring the great outdoors.
