The Closest You Might Get To Investing Like Warren Buffett

 
President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010
President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010

 

Who wouldn’t want to invest like Warren Buffett?

His investments have long beaten the performance of the S&P 500. Plenty of mutual fund and hedge fund managers have tried to do the same. But most fail. That’s why mere mortals should stick to low-cost index funds.

Some people, however, enjoy the added risk of trying to beat the market. If you’re one of them, let me offer a suggestion: There is a simple method with a market-beating record. It doesn’t win every year or even every decade. But its long-term record has beaten the U.S. market index. It takes about ten minutes a year, combining two investment styles from Warren Buffett’s biggest mentors. 

Photo: Pete Souza [Public domain], via Wikimedia Commons

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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12 Responses






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  2. ron says:

    Not sure what to do with this as the examples are US stocks. Those are very risky investments for non-residents unless the total invested value remains below USD 60k.

    • Ron,

      You are correct. This is for Americans who want to roll some dice. Plenty of investors gamble. If they must, this is a better way to do it…with a small portion of their portfolio. For guys like you and me, we can just read with interest, and then maintain our portfolios of low-cost index funds.

      Cheers,
      Andrew

  3. ron says:

    Couldn’t agree more. After 30 years trying to outsmart the market with stocks and mutual funds, the last 3 years with some simple ETF’s and without doing much work myself, have been massively better.
    As I put some reasonable tolerance levels on the allocation I have not even had to re-balance.
    It is almost getting boring 🙂

  4. Index says:

    Hi Andrew
    I am a UAE based UK national following a global nomad couch potato strategy.
    I have your first book and am looking forward to getting the second edition when it’s available in the shops here.
    I presently have 35% of my portfolio allocated to bonds – 20% IGLO, 15% CORP.
    I see that iShares are now offering what seems to be a new global bond fund with a lower charge – its ticker is AGGG.
    I am thinking about consolidating my bonds into AGGG. What are your thoughts on IGLO and CORP as compared to AGGG?
    Thanks for your time.
    Index

  5. Jose says:

    Hi,

    Based in Thailand, just read your second book. Not sure which of the 3 strategies you discuss would be best for me but would like to go with the couch potato……Opening the brokerage account seems difficult. Saxo seem to have a minimum of USD2000 but then they state that they won’t take you on if you have less than 100k?

    DBS Vickers requires you go to Singapore, they also seem to have a Thai option but when looking at the opening of the online account you need to pick an account type…..confused? Which account type would I need?
    https://app1.dbsvitrade.com/OpenAccount/en/Register/DBS%20%7C%20Open%20Account

    Am I right in saying that in your book you say that the index you buy is not important? Picking the ‘right’ one is not important?

    If I know I am going to retire in Spain, and I am 32 at the moment….would I be right in saying I should invest 30% in bonds (Spanish bonds?) 35% in Spanish stocks and 35% in global stocks?

    Is that right?

  6. Index says:

    Andrew,
    Thanks. No, I mean AGGG which is listed on the London exchange (https://www.ishares.com/uk/individual/en/products/291773/ishares-global-aggregate-bond-ucits-etf-usd-(dist)-fund)
    What do you think?
    Cheers – Index

  7. Yes, that looks fine.

    Cheers,
    Andrew

  8. Jon Ball says:

    Hi

    I am a British citizen and I currently hold a Saxo account in Singapore but due work reasons I have been relocated to the USA for two years. This means I have to close my Saxo account as they do not operate in the USA and anyone living for over sixth months in the states must close their account. The way I see it I have 4 options: 1. open a US trading account and transfer the Saxo account to it. 2. Open a UK trading account and do the same. 3. Sell all investments and close the Saxo account, transferring all funds to UK and then open a new trading account in either USA or UK. 4. Same as option 3 but put money into savings account until I can re-open my Saxo account. I would really appreciate some advice on this. I am following your Couch Potato approach to investing. I am also not sure whether transferring account funds is a better option than selling and then re-investing.

    • Jon,

      If you’ll be living in the U.S., with a legal U.S. green card, you’re legally better off investing in the United States during that period. But book an appointment with an international tax accountant for their professional opinion.

      Cheers,
      Andrew











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