Rule #1 Finance Blog

With Investor Phil Town

Warren Buffett’s Advice: Why You Should Buy and Hold

“Our favorite stock holding period is forever.” – Warren Buffett

I want to talk to you about some of the best advice I’ve ever received from one of my favorite investors, Warren Buffett. The key to successful investing is buying a great company when it’s on sale and then holding it for long periods of time.

In this video, I explain why a buy and hold strategy can pay off for you in big ways.

There’s truly nothing on the planet that can produce wealth like a great company that you can buy at a great price and hold.

In a nutshell, if you bought Walmart when it was just getting going as a public company in the 1970’s and it doubled it’s growth rate every 4 years. In 32 years when you’re ready to retire, Walmart has doubled 8 times.

What this means is, if you invested 10,000 dollars into Walmart, and 32 years later, when you’re ready to retire your $10,000 has compounded into about $2,400,000. By literally doing nothing, you’ve turned $10,000 into $2.4 million. Compound growth rates are hard to understand, but once you understand them you’ll get rich.

That’s why buying and holding can be so powerful. Especially, if you’re starting early.

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Featured Photo Credit: Stuart Isett/Fortune Most Powerful Women/Flickr, used under a Creative Commons license.