Warren Buffett's investment strategy: Why the stock guru recommends long-term investing

Warren Buffett's investment strategy: Why the stock guru recommends long-term investing

According to a report by www.finanzen.net,

Warren Buffett, the longtime CEO of Berkshire Hathaway, is warning investors about a common mistake many market participants make. He emphasizes that expecting the right time to buy and sell is a fallacious thought and instead recommends passive investing instead of active trading.

Buffett emphasizes that he usually only buys stocks when they are cheaply valued and then holds them for a longer period of time. He himself prefers to invest in companies “forever” and warns against being pressured into buying or selling by short-term market fluctuations.

The impact of these recommendations from Warren Buffett could be significant. If many investors follow his recommendation and increasingly turn to passive investment strategies, the stock markets could be stabilized and long-term investments promoted. This could result in lower trading volumes, but contribute to solid and less volatile market performance in the long term.

Buffett advises most market participants to buy low-cost ETFs that track the S&P 500 instead of actively trading. He believes that most retail investors are unable to beat the market and therefore recommends passive investing in broad-based funds.

Overall, Buffett's recommendation shows a clear trend towards long-term, passive investment strategies. These could contribute to a more stable and sustainable development of the markets and reduce the risk of short-circuit reactions.