Top 5 Investment Wisdoms from Warren Buffett at Berkshire’s Annual Meeting

1. Never Use Borrowed Money To Invest The coronavirus-induced panic in March was considered by some to be a Black Swan event. Many investors got liquidated as they had no idea the pandemic was going to crush the stock market. Buffett uses the pandemic to illustrate why it’s not a good idea to invest borrowed money.

2. Instead Of Paying For Investment Advice, Just Buy The S&P 500 Retail investors typically pay market analysts to get timely stock picks. The legendary investor discourages this practice. Buffett says it is better for average investors to buy the broad market and hold on to their investments.

3. There Market Guarantees You Nothing The uncertain nature of investments is why people should only invest what they can afford to lose. At Berkshire’s annual meeting, Buffett emphasized that no one knows how the market will perform in any timeframe.

4. Admit When You’re Wrong And Cut Your Losses Over the weekend, news broke that Buffett dumped all airline stocks in April. Even the legendary investor gets it wrong sometimes. It literally happens to the best of us. Buffett says, When we bought [airlines], we were getting an attractive amount for our money when investing across the airlines. It turned out I was wrong about that business.

5. Never Bet Against America Despite the gloomy economic outlook, the Oracle of Omaha still believes that America will prosper and that betting against it is foolish.

You just had to believe that the American miracle was intact. You didn’t have to read the Wall Street Journal. You didn’t have to look at the price of your stock. You didn’t have to pay a lot of money in fees than anybody…Nothing can stop America when you get right down to it. Investing doesn’t have to be complicated. Warren Buffett stays true to his form of long-term and fundamentally sound investing.

Top 5 Investment Wisdoms from Warren Buffett at Berkshire’s Annual Meeting, CCN, May 5