Warren Buffett is the world’s largest investor. Over the past seven decades, a $100,000 investment has grown into a conglomerate with more than $700 billion in assets.
With such a track record, it’s no surprise that many investors are eager to copy the billionaire’s approach, including this author. Hence, there are four strategies I use to copy Buffett’s investing style.
Investing next to Buffett
One of the strategies I use to invest with a billionaire is very simple. I own shares in his American company Berkshire Hathaway.
This company has two classes of stock. A shares, each worth more than $400,000, and most are owned by Buffett himself. Then there is the “B” stock. These are cheaper at $285 each.
I own Berkshire Hathaway B shares and would like to buy more because I think this is the best way to invest with a billionaire.
However, there are other ways you can invest with Buffett’s side without buying Berkshire shares. One way is to copy the investments he owns.
His biggest position in the portfolio is An apple. The technology company is known worldwide for its refined products and high spending on research and development. I would like to buy shares in this company to take advantage of its world-leading brand and growth potential.
Another share in the Berkshire portfolio that I will buy to invest along with Buffett Coca Cola. The company’s stock has been an integral part of Buffett’s portfolio since the 1980s.
A disadvantage of this approach to stock picking is that it takes time and effort to research these companies. Also, some investors may not feel comfortable owning US securities.
This is one of the stocks I have in my portfolio Personal Asset Trust. This investment firm owns a portfolio of stocks and shares, including Berkshire Hathaway. This could be a way for UK investors to invest alongside Buffett without facing the challenges of owning US stocks.
The downside to this approach is the fact that personal assets own stocks other than Berkshire. So there is a risk that fund managers will be surprised by poor stock recommendations. With that, I would like to buy more shares.
The last approach I would take to invest along with Buffett is this CFP SDL UK Buffettology Trust. This fund is also located in the United Kingdom and attempts to invest according to the same principles as Buffett. So far, the fund has generated impressive returns using this approach. However, investors should not use past performance as a measure of future prospects.
These are the investment strategies I will use to invest along with Warren Buffett. They all provide some level of exposure to the billionaire and his investing style, although each has advantages and disadvantages.
This article was written in English by Manika Premsingh and On 11/21/2020 on Fool.co.uk chest. It has been translated so that our German readers can participate in the discussion.
Motley Fool UK does not have a position in any of the stocks mentioned.
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