Reasons Investors Should Not Follow Warren Buffett

Warren Buffett’s name is often referred to as one of the most successful investors on earth. Having an average wealth of USD 100 billion or around Rp. 1,444 trillion (assuming an exchange rate of Rp. 14,450 per US dollar), Buffett got it by being a smart investor.

Thanks to this, not a few investors have followed in Buffet’s footsteps in investing. However, you may have a different way of investing with Buffet.

Reporting from The Motley Fool, Sunday (22/8/2021), the first reason why you don’t need to invest like Buffett is stock-picking ability. Warren Buffett knows a lot about analyzing companies and selecting stocks.

However, many everyday investors do not have nearly the same level of knowledge and skills as Buffett. In fact, it is for this reason that Buffett often recommends that casual or novice investors allocate their money into index funds.

An index fund is a passively managed fund that tracks multiple benchmarks. The S&P 500 index fund, for example, would aim to match the performance of the S&P 500 itself. The second reason is that you cannot afford the same level of risk. Warren Buffett definitely has a lot of money.

This means that Buffett can continue to hold much of his fortune in stocks even though some of the stocks he owns may be risky.

Generally, as you get older, it’s a good idea to move away from stocks and switch to safer investments, such as bonds. This doesn’t mean seniors have to completely move away from stocks, but cutting back is a good idea.

Different Goals
At 90, Buffett doesn’t have to follow that rule of thumb. Even if he lost $1 million in the stock market overnight, it wouldn’t reduce his fortune.

However, permainan togel online terbaik not all investors have the same level of wealth as Buffett, and so cannot take the same level of risk. Furthermore, you may have different goals.

Warren Buffett’s goal is to give away his impressive fortune, and at this point, he is almost half way to achieving that goal. Some may even invest in retirement funds.

There are also those who intend as an inheritance for their children in the future. Some are even intended for charity. So you have to take a different approach than Buffett to investing. than Buffett at all.