There's a reason I admire Warren Buffett, and it's not just because he's managed to amass a multibillion-dollar fortune. One of the things that's always impressed me about Buffett is how generous he is with advice.
Whether it's giving job-search tips to new college graduates or calming people's fears during a stock market crash, Buffett never seems short on words of wisdom. And through the years, I've followed a lot of his tips in the course of building my portfolio. Here are a few specific pieces of advice that have served me well and are worth paying attention to.
1. Look for quality, not a bargain
Some stocks trade at a hefty price point, so much so that in the past, I've balked at the idea of buying them. But one thing Buffett has always said is that it's important to focus on quality over price.
You might have the opportunity to buy shares of a given tech company at $200 apiece while another company's shares trade for $500 apiece. But the $200 stock isn't necessarily the better deal. And so it's better to focus on the businesses you're buying into than the prices they're trading at.
Incidentally, these days, many brokerages let you buy shares on a fractional basis. So if you're hesitant to spend a lot on a single share of stock, you don't have to.
2. Hold stocks for a long time
Buffett has famously said that if you're unwilling to hold a stock for 10 years, you shouldn't even own it for 10 minutes. And that's advice I've followed since I started buying stocks.
Some people think they can strike it rich in the stock market by buying low and selling as quickly as possible. But I'm a firm believer that the best approach is to load up on quality investments and hold them for many years so they can appreciate in value.
3. Don't fall victim to peer pressure
Years ago, meme stocks weren't a thing. Now, online influencers have the ability to drive stock prices upward or downward.
But ultimately, meme stocks are a risky bet, namely because the businesses behind them are often shaky and unreliable. And so rather than buy meme stocks because they're trendy, it's better to focus on quality businesses that are likely to stay strong for years.
The same holds true with crypto. Many people have invested in digital currencies over the past few years. But if you're not comfortable doing so because you think cryptocurrency is too speculative, put your money elsewhere. (Incidentally, Buffett is not a fan of crypto. At all.)
Learn from one of the greats
It's easy to look at someone like Warren Buffett and be envious of his success. But the reality is that while he's not going around writing checks to individual investors, he's more than happy to share some of his secrets in the hopes of helping others achieve their financial goals. And so whether you're new to investing or have been at it for years, it pays to keep these points in mind as you build up your portfolio.