To the nonbillionaires among us, investing tips from the Oracle of Omaha are always worth their weight in gold. USA Today recently offered a trio gleaned from an interview with Warren Buffett.
Buffett’s “Three Mistakes to Avoid”:
“1. Trying to time the market. “People that think they can predict the short-term movement of the stock market — or listen to other people who talk about (timing the market) — they are making a big mistake,” says Buffett.
2. Trying to mimic high-frequency traders. Buying stock in a good business and hanging on for the long term, he says, is a better strategy than flipping stocks like a short-order cook flips pancakes.
“If they are trading actively, they are making a big mistake,” Buffett says.
3. Paying too much in fees and expenses. There’s no reason to pay an expensive management fee to invest in a mutual fund when super-low-cost index funds that mimic large indexes like the Standard & Poor’s 500-stock index are available, he says. If they are incurring large expenses in connection with their investing,” says Buffett, “they are making a big mistake.”
USA Today also offers a listing of some of Buffett’s top stock picks. Here’s the top five and how they compare with BetterInvesting’s “Top 100 Companies Held by Our Members.” Buffett’s rankings came in June, BetterInvesting’s were taken in December 2012 and published in April.
- Wells Fargo (ticker: WFC); BetterInvesting investment clubs, No. 31
- The Coca-Cola Company (KO); BI clubs, No. 25
- International Business Machines (IBM); BI clubs, No. 59
- American Express, (AXP); BI clubs; BI clubs, not on the list
- Procter & Gamble (PG; BI clubs; BI clubs, No. 11
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was born out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/investing/landing/openhouse/blog/index.html or call toll free (877) 275-6242.