Warren Buffett's Favorite Investment Advice

BY MINDA ZETLIN, AUTHOR OF 'CAREER SELF-CARE: FIND YOUR HAPPINESS, SUCCESS, AND FULFILLMENT AT WORK'@MINDAZETLIN

When Warren Buffett hands out investment advice, it's smart to listen. The 93-year-old investor has built up a net worth of $120.8 billion and helped his colleagues and Berkshire Hathaway's shareholders become wealthy as well.

While Buffett uses his and his team's considerable research skills and financial finesse to guide Berkshire Hathaway's portfolio, his advice to the rest of us mortals amounts to: "Do as I say, not as I do." Buffett says most of us should not be investing in individual stocks, we should be buying index funds instead. He feels so strongly that this is the right thing to do that he's proved his point by issuing a challenge to hedge fund managers everywhere. Buffett bet $1 million (for charity) that they would not be able to produce better returns than a Vanguard S&P 500 index fund over 10 years. Buffett easily won that bet.

When things go wrong, double down on that strategy, he advises. "Keep buying it through thick and thin, and especially through thin," Buffett told CNBC. "The temptation when you see bad headlines in newspapers is to say, well, maybe I should skip a year or something," he said. "Just keep buying. American business is going to do fine over time." 

Just keep buying. Those three words tell you everything you need to know about the consistency, patience, and trust in the strength of the American economy that made Buffett one of the richest people in the world. That's true even though he himself doesn't invest in index funds with Berkshire Hathaway's portfolio, and even though he's done more selling than buying of late. 

Focus on the long term

The underlying message is to find a wise strategy and then stick with it through ups and downs, keeping your focus on the long term. Admittedly, if you bought shares of an index fund and then the market went down and they lost half their value, buying more can feel like throwing good money after bad. But if you think about it, shares that cost half of what they did a few months ago are twice as good a deal as they were back then. So buying more is probably exactly what you should do.

Buffett's advice applies to other areas of your life, not just investing. In today's fast-changing world, we all value the ability to spot new trends, find new innovations, and change course quickly in response to new threats or opportunities. Those are all important skills, especially for an entrepreneur. But patience and consistency are valuable too, and even more so during uncertain times. 

There's a growing audience of Inc.com readers who receive a daily text from me with a self-care or motivational micro-challenge or tip. Often, they text me back and we wind up in a conversation. (Want to learn more? Here's some information about the texts and a special invitation to an extended free trial.) Many are entrepreneurs or business leaders and they know how powerful patience and consistency can be, both for investing, and also for guiding a business. Once you've found a strategy that you truly know is right, sticking with it through thick and thin--"especially through thin"--can help create your own long-term success. 

Photo credit: Getty Images.