If Warren Buffett Could Tell You 1 Investment to Make, This Would Probably Be It | The Motley Fool (2024)

FAQs

What is the simplest investing strategy by Warren Buffett? ›

Warren Buffett is undoubtedly one of the most respected investors of all time. On paper, Buffett's investment strategy is pretty simple: Buy businesses, not stocks. In other words, think like a business owner, not someone who owns a piece of paper (or these days, a digital trade confirmation).

Key Takeaways. Berkshire Hathaway's portfolio's five largest positions are in Apple Inc. (AAPL), Bank of America Corp (BAC), Chevron (CVX), The Coca-Cola Company (KO), and American Express Company (AXP).

Rule 1: Never lose money.

This is considered by many to be Buffett's most important rule and is the foundation of his investment philosophy.

Buy and hold

A buy-and-hold strategy is a classic that's proven itself over and over. With this strategy you do exactly what the name suggests: you buy an investment and then hold it indefinitely. Ideally, you'll never sell the investment, but you should look to own it for at least 3 to 5 years.

In addition to Occidental Petroleum Corporation (NYSE:OXY), stocks such as Bank of America Corporation (NYSE:BAC), Apple Inc. (NASDAQ:AAPL), and the Coca-Cola Company (NYSE:KO) are also amongst the top 15 stock picks of Warren Buffett's 2023 portfolio.

Warren Buffett is perhaps the best example of the power of long-term compounding. Buffett uses compound interest, dividend reinvestment, and the power of constantly reinvesting the operating cash flow generated by Berkshire's businesses to his advantage.

Buffett has made his fortune by relying on the time-tested rules of value investing, meaning finding high-quality companies at fair market valuations. He then holds these investments for the long term, some indefinitely, always allowing the power of compounding work its magic.

The Motley Fool has positions in and recommends Alphabet, Bank of America, Meta Platforms, Nvidia, Palantir Technologies, and PayPal.

What stock will grow the most in 2023? ›

These are: invest within your circle of competence, think like a business owner when buying equities, and buy at inexpensive prices to provide a margin of safety.

Treasury Bills, Notes and Bonds

U.S. Treasury securities are considered to be about the safest investments on earth. That's because they are backed by the full faith and credit of the U.S. government. Government bonds offer fixed terms and fixed interest rates.

The Motley Fool's approach to investing prioritizes buying and holding quality stocks for long periods of time. We focus the most on the business fundamentals of the companies in which we invest, rather than on their stocks' short-term price changes.

Buy-and-hold is a passive, long-term investment strategy that creates a stable portfolio over a long period of time to generate higher returns. Instead of trading shares based on stock market timing, investors buy stocks and hold onto them despite any market fluctuation.

Share of Berkshire's Portfolio

Apple is the world's most valuable public company and Warren Buffet's largest stock holding.

In Bill Gates's current portfolio as of 2023-03-31, the top 5 holdings are Microsoft Corp (MSFT), Canadian National Railway Co (CNI), Berkshire Hathaway Inc (BRK. B), Waste Management Inc (WM), Caterpillar Inc (CAT), not including call and put options.

“Price is what you pay, value is what you get.” This famous Buffett quote strikes at the heart of the “value investor” approach and reveals the secret of how Buffett made his fortune.

What stocks did Warren Buffett sell in 2023? ›

Sold: U.S. Bancorp (USB)

Buffett first invested in U.S. Bancorp back in 2006, but he trimmed his stake aggressively in the third and fourth quarters. Berkshire sold its remaining 6.6 million shares of USB stock in early 2023, closing out Buffett's investment in the bank after 17 years.

Article snapshot. Elon Musk, currently worth $180 billion, has built his wealth with long-term investments and successful entrepreneurial ventures like Tesla, SpaceX, and PayPal. His current portfolio mostly consists of his companies' shares, with Tesla being the highest at around $70 billion.

“You're looking for three things, generally, in a person,” says Buffett. “Intelligence, energy, and integrity.

Anyone can invest in Berkshire Hathaway if they have enough money to buy at least one share (less than $300 in early 2023).

Which stock has high potential? ›

For the rest of 2023, investors should consider some safe stock winners like Walmart (NYSE:WMT), Home Depot (NYSE:HD) and O'Reilly Automotive (NASDAQ:ORLY). Today, these stocks still have substantial competitive advantages and unique business characteristics likely to support outperformance in this cycle.

It is the $1 test that Warren Buffett wrote about in his 1983 shareholder letter. He said, "We test the wisdom of retaining earnings by assessing whether retention, over time, delivers shareholders at least $1 of market value for each $1 retained."

So, what exactly is Rule #1? It all started with Warren Buffett, who said "there are really just two rules of investing: Rule 1: Don't lose money; Rule 2: Don't forget rule number one." Today, you'll learn how to use Rule #1 to help you become financially independent. You're Investing In. Must Have A Good "Moat."

A 70/30 portfolio signifies that within your investments, 70 percent are allocated to stocks, with the remaining 30 percent invested in fixed-income instruments like bonds.

Warren Buffett's Four Pillars of Investing. Quality of Information. Consistency of Earnings Growth. Finding Opportunities To Drive Your Investment Style.

What is the simplest investment strategy? ›

Buying and holding investments is perhaps the simplest strategy for achieving growth, and over time it can also be one of the most effective. Those investors who simply buy stocks or other growth investments and keep them in their portfolios with only minor monitoring are often pleasantly surprised with the results.