Warren Buffett Advice: What the Best Investments Look Like

If you want to invest like Warren Buffett, the greatest investor of all time, here is an important piece of advice to help you find the top stocks to buy.

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If you’ve ever heard of Warren Buffett, you know that he’s a long-term investor. Buffett became one of the richest people in the world simply by buying and holding stocks for the long term.

Buffett believes that business activity will continue to expand over the long run, especially in America, the strongest economy in the world. With continuous innovation and new technology being invented, the economy will always be growing.

So naturally, if you buy the best companies and hold them for the long run, you should be rewarded. It’s this philosophy that has made Warren Buffett one of the best investors of all time.

Of course, you can’t discount his raw intelligence and ability to understand businesses. At the same time, though, the simple fact of deciding to buy and hold for years is what’s made him the majority of his money.

From 1965 until 2020, Warren Buffett has made a total return of over 2,800,000%. That’s a compound annual growth rate of 20% for over 50 years.

To give you an idea of how much money that would work out to, if you had invested $10,000 with him in 1965, without adding any more savings or buying any other stocks, that $10,000 would be worth over $225 million today.

This shows what an incredible investor Warren Buffett is and how important it is to invest for the long term.

Warren Buffett advice: what the best investments look like

It’s clear that Buffett has proven his investing style is the best. But while you may know that investing for the long run is important, if you don’t know what stocks to buy, it doesn’t matter what your investing timeframe is.

Here’s an important quote from Warren Buffett, explaining exactly what kind of stocks are usually the best investments. “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”

This is an important quote for investors to understand in any market conditions. However, especially in this day and age with so much speculation and fear of missing out from investors, it’s key to remember that the best investments are usually in high-quality but boring companies.

Rather than trying to speculate on a stock like GameStop or invest in a high-risk growth stock, Buffett sticks to businesses he knows and understands — companies and industries that have been around for years. They may not be the most exciting investments, but they are the best businesses to buy and hold for decades.

And we know long-term investing is much easier than consistently trying to time the market and speculating on stock price movements. Therefore, focusing on which of these high-quality stocks you want to own is a far better strategy. Here’s an example of a top buy today.

One of the top stocks in Canada to buy for the long run

In Canada, there are several high-quality stocks to buy if you want to invest for the long run, like Warren Buffett. BCE (TSX:BCE)(NYSE:BCE), the largest telecom stock in Canada, is a perfect example.

Because BCE is such a massive company with diversified operations that span the country, it’s extremely safe and capable of protecting your capital.

The company has a massive wireline division, bringing internet cable and phone services to homes and businesses. In addition, it has a wireless business that continues to grow as more consumers are purchasing mobile devices. And it has a media division that helps vertically integrate the company.

In general, much of BCE’s revenue is robust, so you can count on the business to remain strong even during recessions. And because it owns tonnes of long-life assets, it’s a major cash cow.

This allows the company to continue reinvesting in growth for the long run, in addition to paying an attractive dividend to investors. The combination of the two, plus the fact that BCE is so robust, is one of the main reasons it’s a top stock to buy for the long run.

Owning a telecom stock may not be that exciting. As a matter of fact, you could even call the stock boring. But as Warren Buffett reminds us, the best investments usually are.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa owns shares of BCE INC. The Motley Fool has no position in any of the stocks mentioned.

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