Enclosed is link to a 2 minute video interview of Warren Buffett, titled Buffett’s best tip for personal finance.
The greatest investor ever advices that it is a good idea to just buy index funds every month...he uses the analogy of buying a farm.
If you bought a farm it would be futile to look at the daily weather forecast or get a quote on the farm every morning-one would instead consider its productivity over a lifetime-how many bushels of corn it will produce and so on...and so forth! Similarly, if you invest in a ‘cross-section’ of American industry one can hope to do well-provided you don’t ‘dance in and out’ of that investment.
(The 'cross-section' is the reference to a broad market index-or what I call buying 'businesses in the aggregate.')
In all humility, if I may add (my two cents worth) to the Master’s words of wisdom...when you buy a farm you do it with the understanding that there will be interim volatility (some years of famine, drought, excess rainfall, crop failure and so on)-doesn’t mean that one should panic and begin doing ‘analysis’ and ‘data crunching’ about farming!
It really doesn’t help because analysis beyond a point is futile and damaging almost like an overflowing dam!
One would rather consider the 'average' performance or yield from a farm over a long-period of time-maybe even a lifetime.
According to me the Master’s sage advice has a universal application for investors everywhere.
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