Warren Buffett’s best investment tip is pretty simple: Invest in an index for as long as you can. By doing that, you keep your capital growth linked to the global economy, and you don’t need to do much else: The indices keep re-balancing themselves once a quarter. The losing companies go out and new profitable companies come in.
Buffett proposes this tip since most investors are constantly trying to guess when to buy and when to sell, and by doing so, risk failure. However, when you compare Warren Buffett’s portfolio and the S&P 500, it is quite noticeable that his portfolio is doing much better than the index:
When you invest in an index as part of a well-managed portfolio, you get the best combination for optimal exposure to the markets.
Now, after discussing Warren Buffett’s portfolio, let’s have a look at Popular Investor Reinhardt Gert Coetzee’s great portfolio:
This South-African Cadet Popular Investor is a firm believer in long-term investing, and has a great, balanced portfolio, which can give you exposure to selected stocks from the Nasdaq 100 and S&P 500:
98% of his equity is currently being allocated, while keeping his risk score at only 3. I’m often asked how to reduce risk when trading. Well, diversification will do the job.
Have a look below to see how his risk is being handled using diversification:
Looking at his bio on eToro, we can learn all about his investment philosophy:
“Hi, I only hold buy positions in stocks of companies that have been well researched, have proven track records and most of all, I believe have potential to have great returns over the long term. Because of this long-term strategy, please select to copy open trades, as I might not open new trades that frequently. I will also only have open positions on a stock if I believe it still has long-term growth potential, never mind the current price. What a quality stock does in any given day, or even month does not really matter, but rather the long-term return. If we stick to implementing this mindset, we will stand apart from the crowd and not get caught up in the emotional traps other investors do.”
Below are some additional statistics from his investment account:
Now, after analyzing his portfolio, we can move on to see his performance. It is quite impressive: He has had 100% profitable months since he built his portfolio at the beginning of July 2016:
Finally, let’s compare Reinhardt’s portfolio and the S&P 500:
Has the next Warren Buffett started his career as a Cadet Popular Investor on eToro? Only time will tell.
All trading involves risk. Only risk capital you’re prepared to lose. Past performance does not guarantee future results.
Trading history presented is less than 5 years and may not suffice as basis for investment decision. This post is not investment advice.
All figures, data and charts are accurate as of Thursday, 11/5/17. Up to date information can be seen on @reinhardtcoetzee’s profile.