Billionaire Warren Buffett: Top Tips For Investing In The Stock Market

Warren Buffett is one of the most powerful investors in the world.

Today Buffett is CEO of Berkshire Hathaway, but he bought his first stock when he was just 11.

And he’s been very, very good at it. Buffett is worth $82.5 billion, according to Forbes, making him the third richest person alive (behind Amazon founder Jeff Bezos and his friend and Microsoft co-founder, Bill Gates).

So how does he do it? Here are five of his best bits of investing wisdom.

1. Investing is a long game
“Now if they think they can dance in and out [of the market] and buy and sell stocks, they ought to head for Las Vegas. I mean, they can’t do that,” Buffett told “Squawk Box” October 2014. “But what they can do is determinate that there’s a number of solid American businesses, a great number of them, and if you own a cross section of them and particularly if you buy them over time, you basically can’t lose.”

“I know what markets are going to do over a long period of time: They’re going to go up. But in terms of what’s going to happen in a day or a week or a month or a year even, I’ve never felt that I knew it and I’ve never felt that was important,” Buffett told Becky Quick on “Squawk Box” in February 2016.

”I will say that in 10 or 20 or 30 years, I think stocks will be a lot higher than they are now. ”

Buffett has also likened buying stocks to owning more tangible assets. “If you own stocks like you’d own a farm or apartment house, you don’t get a quote on those every day or every week,” Buffett told “Squawk Box.” So, too, should it be when you’re buying a share of a company.

2. Diversify
To protect your money, buy stocks in various different kinds of companies and spread your purchases out over time.

“The best thing with stocks, actually, is to buy them consistently over time,” Buffett told “Squawk Box” in February 2017. “You want to spread the risk as far as the specific companies you’re in by owning a diversified group, and you diversify over time by buying this month, next month, the year after, the year after, the year after.”

3. Stocks are now generally better than bonds
“If you save money, you can buy bonds, you can buy a farm, you can buy an apartment/house — or you can buy a part of an American business,” Buffett said in February. “And if you buy a 10-year bond now, you’re paying over 40 times earnings for something whose earnings can’t grow. You compare that to buying equities, good businesses, I don’t think there’s any comparison.”

A 10-year government bond opened the day at a 2.32 percent interest rate and closed at 2.49 percent on Feb. 27, 2017, when Buffett made the comment. As of Dec. 17, 2018, the 10-year government bond had an interest rate of 2.87 percent.

Meanwhile, the benchmark S&P 500 Index has averaged an annual return of 10.2 percent over the past 30 years, according to FactSet.

Clearly, even as Buffett himself has said, anything can happen in markets. If bond interest rates overtake stock market returns, then this advice no longer holds. “But I would say this: If the 10-year stays at 2.30 [percent interest rate] and it would stay there for 10 years, you would regret very much not having bought stocks now,” Buffett said in February.

“The one thing I’m sure of is that overtime, stocks from this level will beat bonds from this level,” Buffett told “Squawk Box” October 2017. “Stocks [have] been so much more attractive than bonds for a long time now.”

4. You can’t time the market
“You’re making a terrible mistake if you stay out of a game that you think is going to be very good over time because you think you can pick a better time to enter it,” he told “Squawk Box” in February 2017.

5. There’s no room to be emotional
“Some people should not own stocks at all because they just get too upset with price fluctuations. If you’re gonna do dumb things because your stock goes down, you shouldn’t own a stock at all,” said Buffett told “Squawk Box” in February 2018.

By comparison, “If you buy your house at $20,000 and somebody comes along the next day and says, ’I’ll pay you $15,000, you don’t sell it because the quote’s [$15,000],” added. “Some people are not actually emotionally or psychologically fit to own stocks, but I think that more of them would be,” Buffett said, if they were more educated on what they were really buying, which is part of a business.

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5 of Warren Buffett’s best tips for investing in the stock market | CNBC Make It.

[HafezBd]

Is now a good time to invest in stocks? I know everyone says stocks are cheap, but how long will it take for us to recover? Obviously, there are strategies to be used in this market, but these strategies are not available to the average person, so am I better off putting my money elsewhere?

[Will-jgzs]

He's such a loveable billionaire.

[undertakerism]

be greedy when the crowd is fearful and fearful when the crowd is greedy

[rajatsinha]

Patience is tough when you have smartphone to view your portfolio every day

[raqueldominguez]

Tu naturalidad es lo que hace que seas el niño hombre que hay en ti, siempre admirable 💌

[wilfriedvomacka]

The number one tip I LOLed. That is exactly what many people do on markets. The comparison to buying and selling house was great and funny.

[martyskr]

I needed to hear this 10 years ago when the market bottomed.

[charlenextan]

He is quiet these days because he is busy “shopping” at the “2018 Xmas stock clearance sale”!

[siobhanmurphy]

I am new to this, any tips on which stock exchange I should join, was thinking IGMX or Etoro, any advice please as I am in the dark

[wisdomwealthbody]

All are good but 4th is best! Which 4th ? Ask to cnbc.

[ppuhtfrz]

His analogy about the value of a house is just brilliant. It's so clear and simple.

[otappon]

I have been looking for a video like this, concise and helpful. All those other ones are either 30min to 1 hour long, it is simply stupid.
Sure, you get so much information, but not everything is applicable. Here in this video, the ideas are simple and to the point, just probably need more tips, too few of them here.

[hangsengindexstrategy]

The best Hang Seng Scalping Strategy @

[indian]

No one will teach the ground reality to normal public. Few things are kept secret. If there is an urge to become rich then a person has to get the knowledge, apply the knowledge, fail, learn from failure and move ahead.

[lukeyvee]

Interesting, last video I watched of Warren Buffet he said diversification is a hedge against ignorance

[navalkumarshukla]

Even though I didn't get much of it, but yeah it sounded good. xD

[gamerswag]

0:55 1:18 so just skip 3 and have 4 twice?

[ianderrick]

Make the most reasonable choices especially in this pandemic. Don't panic and sell while you are supposed to hodl and vise versa. Know the prospective outline of your choice of stock before investing.

[frankiebones]

Umm you labeled #3 as #4....you had one job 😏

[IamTonyStark]

He has been silent lately, yet this channel speaks for him