Warren Buffett likely counts as the investor most of us would like to emulate.
Not his regular diet of McDonald’s and Cokes, maybe. Though at 92, the investing guru certainly is still going strong.
But after starting his life with virtually no money, Warren Buffett has managed to amass a personal fortune of some US$115 billion. And the Oracle of Omaha has delivered more than half a century of outperformance at Berkshire Hathaway.
He’s done this with some surprisingly simple methods.
“Embrace what’s boring, think long-term, and ignore the ups and downs,” he advises.
As for that long-term thinking, Warren Buffett once quipped, “Our favourite holding period is forever.”
Which brings us back to how Aussie investors are working to build their own wealth.
Do you follow this Warren Buffett investing method?
According to new research from online brokerage Stake, around 50% of Australian investors plan to hold onto their investments for at least 10 years, while 29% said they’ll likely hold their investments for six to 10 years.
Only 5% of respondents said they were looking to build wealth via short-term trading.
In what Stake dubbed ‘The Warren Buffett method’, 64% of Aussie investors said they had a positive 10-year outlook on their investments.
With cost of living pressures biting, however, 39% of investors said they’ve reduced their allocations to savings and investments. Although 65% have made investments over the past six months.
And despite the economic downturn, 67% of respondents said they haven’t sold any investments over the past year. A buy and hold strategy Warren Buffett would no doubt approve of.
Inflation was a concern for most of those surveyed, with 56% saying that “wages not keeping up with inflation” was causing financial distress.
Commenting on the survey results, Stake CEO Matt Leibowitz said:
The pandemic may have been the catalyst for more Australians engaging with the markets, but it’s now clear that this was the start of a long-term shift.
Given the high barriers to entry in the property market, and financial stability being less certain, ambitious Australians increasingly see investing as a way to protect their future.
Which brings to mind another Warren Buffett investing pearl.
“The greatest protection against inflation is ownership in a business that goes up in value.”
