5 powerful Warren Buffett lessons that could benefit ordinary investors
After more than five decades at the helm of Berkshire Hathaway, legendary investor Warren Buffett has announced he’s retiring at the age of 94. He’s credited with turning the failing textile maker into a successful holding company. In May 2025, the BBC estimated Berkshire Hathaway was worth $1.16 trillion (£870 billion).
Considered by many to be the most successful investor of the 20th century, Buffett has regularly featured on lists of the world’s wealthiest people, despite giving away vast sums.
While Buffett has a huge number of resources at his disposal, many of his idioms may be useful for ordinary investors, including these five.
1. Invest with a long-term view
Throughout his career, Buffett has focused on the potential long-term value of stocks and shares.
Indeed, he said: “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”
It’s a useful reminder that trying to generate quick returns could lead to investors missing out on long-term gains. With so many different factors influencing the value of investments, it’s impossible to consistently time the market.
While investment markets often experience short-term movements, historically, they have delivered returns over longer time frames. Investors who plan to hold investments over the long term could benefit as a result.
2. Avoid investing FOMO
Buffett earned the moniker “oracle of Omaha” for his ability to make long-term investment decisions, and he did it without following the crowd.
Investing FOMO (fear of missing out) leads some people to invest in a way that doesn’t align with their strategy because they believe investments are “good” or “safer” if others are choosing them. However, making investment decisions based solely on what others are doing may be harmful.
Buffett once said: “When everyone wants in on it, that’s probably not the right time to jump in.”
When everyone is talking about the latest stock that’s sure to deliver big returns, the buzz has often already led to prices rising. As a result, following the latest trends could lead to disappointment.
It’s also important to note that what is a “good” investment for one person may not be right for another. As your circumstances and goals will play a role in your investment strategy, acting based on FOMO might mean you make investment decisions that don’t align with your financial plan.
3. Invest in what you know
Buffett once advised budding investors that they didn’t have to be experts in every company, but only had to evaluate companies within their “circle of competence”. In other words, stick to what you know, even if an opportunity outside of your knowledge sounds enticing.
Recognising when you could benefit from expert advice or support is beneficial too.
Buffett considered this when thinking about his estate plan. He’s instructed the trustee of his estate to invest 90% of his money into a passive fund, so his wife doesn’t need to make investment decisions day-to-day.
As a financial planning firm, we could help you create a balanced investment portfolio that you can have confidence in, including if you want to take a hands-off approach.
4. Don’t be seduced by a “bargain”
Finding a bargain, whether you’re out shopping or assessing investments, can be thrilling – everyone wants to get something for less if they can. However, looking only at the price when you’re weighing up an investment opportunity might mean you make a decision that isn’t right for you.
Instead, look at the bigger picture. How would the investment fit into your wider portfolio, and does it align with your investment goals?
As Buffett said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
5. Make investing part of your wider financial plan
When you’re setting out or reviewing an investment strategy, it can be easy to look at it in isolation. Yet, by making it part of your wider financial plan, you could improve the decisions you make.
For example, your financial circumstances and goals will play a role in your investment risk profile. Incorporating these areas when weighing up investments could help you strike a balance that suits your needs. Without this approach, you could find yourself taking more risk than is appropriate.
Buffett once noted: “It is insane to risk what you have and need to obtain what you don’t need.”
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Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.