Warren Buffett Quotes on Investing, Life, and Mutual Funds

Why His Wisdom Leads to Mutual Funds

Warren Buffett Speaks At Conference Focused On Detroit's Revitalization

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Warren Buffett's quotes on investing are famous for their simplicity and wisdom. And as you will see, in his own words, he recommends investing in mutual funds.

Mr. Buffett once told shareholders of his company, Berkshire Hathaway, that he would recommend his family invest their inheritance from him in one of the best S&P 500 Index funds, specifically from Vanguard Investments.

Warren Buffett Quote on Vanguard Funds

To begin these Warren Buffett quotes on investing, here is a direct quote from his 2013 letter to Berkshire Hathaway shareholders:

"My money...is where my mouth is: What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors—whether pension funds, institutions or individuals—who employ high-fee managers."

You can't get clearer than these instructions: Mutual funds, especially low-cost index funds, are the best investment type for most investors wanting to outperform the average managed portfolio in the long run.

And even the best Warren Buffett quotes on investing and life can be interpreted as implicit instructions to invest in mutual funds. The power in the universal applications of virtues like simplicity, patience, moderation, and diversity are at the core of Buffett's philosophies.

20 Best Quotes from Warren Buffett on Investing and Life

  1. "The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd."
  2. "Successful Investing takes time, discipline, and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant."
  3. "I don't look to jump over seven-foot bars; I look around for one-foot bars that I can step over."
  4. "In the short term, the market is a popularity contest. In the long term, the market is a weighing machine."
  5. "Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."
  6. "Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing."
  7. "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio's market value."
  8. "The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage."
  9. "I am a better investor because I am a businessman, and a better businessman because I am an investor."
  10. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
  11. "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
  12. "You only have to do a very few things right in your life so long as you don't do too many things wrong."
  13. "Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks."
  14. "It is not necessary to do extraordinary things to get extraordinary results."
  15. "What we learn from history is that people don't learn from history."
  16. "Chains of habit are too light to be felt until they are too heavy to be broken."
  17. "There seems to be some perverse human characteristic that likes to make easy things difficult."
  18. "Nothing sedates rationality like large doses of effortless money."
  19. "The difference between successful people and really successful people is that really successful people say no to almost everything."
  20. "Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."

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