Warren Buffett is one of the most famous and popular investors of all time. The billionaire CEO of Berkshire Hathaway is as well-known for his homespun wit as his long-term investment success, along with his willingness to share his opinions on all things financial.
Dubbed the “Oracle of Omaha,” his annual remarks at the Berkshire Hathaway annual meeting in his hometown draw tens of thousands of in-person attendees, in addition to a worldwide audience of millions. Here are some of his best pieces of advice that apply particularly to retirees.
Have a Purpose
Some Americans view retirement as a time to stop working, “wind down” and finish out their lives. But Buffett suggests a recalibration of this thinking.
By viewing your retirement as simply the next phase of your life rather than a time when you should start “shutting down,” you can plan accordingly and enjoy a fruitful retirement. Buffett believes that without a purpose, retirees can suffer health concerns, which could reduce the quality of their life in retirement and even shorten their lives.
This approach certainly seems to have worked for Buffett. Rather than retiring in the traditional manner after reaching age 65, Buffett has continued to head one of the largest companies in the world, Berkshire Hathaway, even at age 92. His famously poor diet that includes cheeseburgers, ice cream and Coca-Cola doesn’t seem to have slowed him down, even at an advanced age, so perhaps his advice holds merit.
Don’t Risk Your Financial Security for Family
Buffett doesn’t suggest that you abandon your family financially, but he does encourage you to take care of yourself first. If you dig yourself into a financial hole in retirement by helping your family members, you won’t have any source of income to replenish your funds. This doesn’t make you selfish, just practical.
If you still have a large retirement account as you approach the end of your life, that is the time you should think about leaving more money to your heirs. But you should enjoy most of it yourself while you’re still in retirement. As to how much you leave, Buffett said “the perfect amount is enough money so they would feel they could do anything, but not so much that they could do nothing” in the book “Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2013.”
Pick Up an S&P 500 Index Fund
Two of Buffett’s most famous proclamations about investing are that people tend to make it more complicated than it is, and that buying a low-cost index fund is the way to go for most investors. For one thing, you may live a lot longer than you imagine if you retire at age 65, perhaps 30 years or more. This suggests that an allocation to stocks is still appropriate for retirees, who will still likely have plenty of time to recover from any bear markets.
However, Buffett also strongly believes that it’s nearly impossible to beat the stock market’s return over time for even professional investors — especially after factoring in fees — making an S&P 500 index fund a better option. Buffett even goes so far as to say, “I just think that the best thing to do is buy 90% in an S&P 500 index fund,” when referring to how he wants his estate to be invested after he passes. If nothing else, this is a great way to avoid paying excessive fees in your investment account, which can add up over time and drag down your return.
What Do Advisors Say?
Buffett has an interesting relationship with financial advisors. Many advisors quote Buffett religiously, suggesting he’s one of the greatest investors of all time, while others are critical of his investment advice.
For starters, many advisors would suggest that a 90% allocation to the S&P 500 is too heavy for almost anyone, particularly someone of retirement age or older. They also argue that his advice on investing is too simple.
Buffett counters that this is because advisors are incentivized to make investing seem more complicated so they can earn more money. “It’s amazing how hard people make what is a simple game,” Buffett said of advisors. “But of course, if they told everybody what a simple game it was, 90% of the income of the people that were speaking would disappear.”
Buffett went even further than this, saying that “you can have monkeys throwing darts at the page, and, you know, take away the management fees and everything, I’ll bet on the monkeys [over the advisors].”
The bottom line is that you’ll have to take Buffett’s investment advice with a grain of salt, as he’s one of the richest billionaires in the world and the way he approaches things might be different than you. But there’s no denying that having a purpose in retirement, choosing historically successful, low-cost investments and avoiding fees and other drains on your retirement account are all solid pieces of investment wisdom.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
