Warren Buffett, a rock star in the world of investing, has noticed the pattern of panic in the stock market recently and is using this volatility to his advantage. I am still buying into the market; the only change I’ve made is to buy more stocks, even if I don’t get the price at the lowest point on the curve.
Buffett is filling up his personal portfolio with American stocks with the goal of having an asset allocation 100% in equities in a short time. He sees fear in the market now, and he is sticking to a mantra that has worked well for him throughout his life: “Be fearful when others are greedy, and be greedy when others are fearful.”
You might think it would have been impossible for an investor to lose money during a century marked by [a gain of 17,320% in the Dow]. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
This is an opportunity that comes around only once every few decades. If you want to have the long-term gains that financial advisers claim stocks can provide, you have to buy low and sell high rather than buy happy and sell afraid.
Photo credit: TEDizen
Buy American. I Am., Warren E. Buffett, New York Times, October 16, 2008 via ramit.
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Definitely Mr.Buffet is the great investor and stock genius of all times, but is investing in stocks a good choice for a better than average “Joe six pack” who has about $50k to $100k in savings. From the last 10 years of experience with my stocks I feel that stocks are good for people who have a solid net worth thank god I realized that last year and sold my position to pay down my mortgage. That move reduced my mortgage payment by half.
Just an FYI when Mr.Buffet buys stocks he is not buying ordinary shares like an average Joe he is getting the ultra premium one for at lest one third of the market price with at least 10 % guaranteed annual dividend. Take an example GS he secured senior preferred shares with 12% annual dividend.
I am not discouraging any better than average Joe from investing in stocks, feel free to make the stock brokers, advisers or other trading secret provides rich.
Thanks
Agreed. I just brought VFINX from Vanguard for $3000.
This is why I love Buffett: he walks the walk and talks the talk. He is a true maverick.
Sam: When Buffett buys stocks for Berkshire Hathaway, he gets the preferred stocks with the guaranteed dividends, etc. I’m pretty sure he doesn’t get the same deals when he buys for his own portfolio. His recent article was about his personal portfolio, not Berkshire’s portfolio.
If ONLY I could afford to buy a six-pack of beer! There’s just a tad difference between Warren’s discretionary spending and mine… just a tad. Need to save for that plumber’s license!
I’ll do what Warren does! He is the richest man in the world, so I reckon he knows a thing or two.