There is no question that Warren Buffett is one of the greatest investors of all time. It is worth studying the strategy of any investor who can consistently return 20% per year for numerous decades.
And luckily for investors, Warren Buffett has offered some of the most advice of any successful investor. Much of this advice is extremely useful, whether he’s talking about personal finance or investing in stocks.
Essentially, Buffett’s advice helps investors realize that investing doesn’t have to be difficult. Having a well-thought-out plan and staying disciplined and patient are some of the most important qualities you need to be successful.
Over the years, Buffett has offered so much advice, and numerous books have been written on it. Investors have a blueprint on how to build a massive, rapidly growing portfolio.
And while he recommends most investors buy index funds, many elect to buy stocks anyway. So, if you’re going to pick your own stocks, here are the most important tips to remember.
Warren Buffett: Make long-term investments
The most important thing to remember when investing is to look for long-term investments. Warren Buffett’s preference is growth stocks with the potential to continue growing long term.
Although he used to prefer value stocks, today, he prefers growth stocks with years of potential. In fact, Buffett has said he would rather buy wonderful companies at a fair value instead of fair companies trading at wonderful values.
So, when you can find great companies that have the potential to grow long term, investors should buy these without question.
These stocks are ideal, because if the companies are strong enough, you shouldn’t ever have to sell them. Buffett has said before that his favourite holding period is forever.
Another of Warren Buffett’s most famous pieces of advice is that if you aren’t thinking about owning a stock for 10 years, you shouldn’t even think about owning it for 10 minutes.
This makes investing relatively easy as long as you can stay disciplined and patient. Then, of course, it all comes down to is finding high-quality stocks that can grow for years.
A top Canadian stock to buy today
If you’re following Warren Buffett’s advice, one of the top stocks to consider is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP).
Brookfield is one of the best stocks you can own, because it is extremely reliable and will also grow consistently for years.
The stock gives investors exposure to some of the highest-quality infrastructure assets. Brookfield’s massive size allows it to find deals all over the world. This not only diversifies the portfolio but helps the company find the best deals available.
With assets in the utilities, midstream, transportation, and data infrastructure industries, management is consistently looking to recycle capital and find new, high-potential investments.
Plus, in addition to all the long-term growth, it pays a 3.8% dividend today. This makes Brookfield a perfect stock for fans of Warren Buffett, since you can be confident owning the stock for years.
Often one of the main concerns that investors have when looking at buying a stock is its price. This is perfectly logical and can be important. You don’t want to buy stocks that are severely overvalued.
But if the stock is high enough in quality, Warren Buffett recommends you don’t try and wait to buy it undervalued. As soon as you believe it has fair value, it’s time to invest today.
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Fool contributor Daniel Da Costa owns shares of BROOKFIELD INFRA PARTNERS LP UNITS. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.