From USA Today Warren Buffet now 83 speaks about how to invest wisely
“Doing reasonably well investing in stocks,” Buffett says, “is very, very easy.”
“Buy an index fund, preferably over time, so you end up owing good businesses at a reasonable average price,” says Buffett. “And that is all you have to do.”
Its not exactly what Warren Buffett himself did identifying individual stocks like GEICO, Gillette, American Express and Coke when undervalued and taking big positions or buying the company entirely.
Top 3 things to avoid when investing (gone is the first rule ‘Don’t lose money and the second rule “See rule 1”):
1. “People that think they can predict the short-term movement of the stock market — or listen to other people who talk about (timing the market) — they are making a big mistake,” says Buffett.
2. “If they are trading actively, they are making a big mistake,” Buffett says. Trying to mimic high-frequency traders. Buying stock in a good business and hanging on for the long term, he says, is a better strategy than flipping stocks like a short-order cook flips pancakes.
3. Paying too much in fees and expenses. There’s no reason to pay an expensive management fee to invest in a mutual fund when super-low-cost index funds that mimic large indexes like the Standard & Poor’s 500-stock index are available, he says