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Buffett's Investing Lessons: What They Mean for ETF Investors
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Billionaire investor Warren Buffett — the Oracle of Omaha — is known for his value investing style. Many want to mirror the legend’s investing strategy and emerge as a winner, having navigated the turbulent financial and economic waters. Let’s delve deeper into Buffett’s final letter, and analyze his investing philosophy.
Long-Term Discipline Wins
Buffett reminds shareholders that Berkshire has fallen 50% three times in 60 years and always recovered. Buffett urged investors not to despair in such situations as “America will come back and so will Berkshire shares”. We expect this principle to hold good for several investing modes.
Market crashes are normal. Holding broad S&P 500 ETFs like S&P 500 (SPY - Free Report) , (VOO - Free Report) should reward investors if held for the long-term. Panic selling kills long-term compounding. Buffett’s advice for individual investors remains clear: in downturns, stick with your long-term investment plan.
Is Cash King If One Has Fewer Options to Explore?
Warren Buffett, now 95, has watched more market cycles than most. Berkshire Hathaway has massive cash pile, with about 31% of its portfolio held in cash and short-term Treasury bills, a record $381 billion.
His letter indicated that because of “Berkshire’s size and because of market levels, ideas are few – but not zero.” With market levels currently high, it is tough to find many undervalued options. Along with many investment houses like Motley Fool, we also believe that this shows that cash is still king.
Investors, who don’t have strong stomach for risks, can thus hold cash. Investors can play the cash-like ETF PIMCO Enhanced Short Maturity Active ETF (MINT - Free Report) , which is off only 0.14% this year (as of Nov. 13, 2025), while the ETF yields 4.72% annually (read: Cash Is King: Money-Market ETFs in Focus).
Diversification is the Key?
Buffett said in his letter that "in aggregate, Berkshire’s businesses have moderately better-than-average prospects, led by a few non-correlated and sizable gems.” Does it mean a portfolio of a non-correlated products wins? Is diversification the key to the success?
The ETF or the basket approach is a great solution in this case. All-cap blend ETF iShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) can be played here. Diversification offers better downside protection (read: Buy, Hold and Build Wealth: ETFs for Long-Term Investors).
Learn from Your Past Mistakes
Buffett wrote "My advice: Don’t beat yourself up over past mistakes – learn at least a little from them and move on. It is never too late to improve." Every cycle teaches a lesson that high growth stocks can crash fast. One should thus keep something in their portfolio that focuses on low-valuation, stable, and value stocks.
Even if AI is a hot concept, even if growth stocks rally hard on the tech boom or the easy Fed policy, one should not forget quality products. One should not put all eggs in one basket. Vanguard Value ETF (VTV - Free Report) , Invesco S&P 500 Quality ETF (SPHQ - Free Report) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) are some of the stable investments, in this regard.
Shareholder-Conscious Management: A Desirable Trait?
Buffett said “Berkshire has a more shareholder-conscious management and board than almost any company with which I am familiar (and I’ve seen a lot).”
Note that share repurchases are a common mechanism for companies to return value to shareholders and boost their stock prices. Plus, dividend hikes are another process to reward shareholders. Hence, Invesco Buyback Achievers Portfolio (PKW - Free Report) and ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) are the ETFs that can be tracked for shareholder value maximization.
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Buffett's Investing Lessons: What They Mean for ETF Investors
Billionaire investor Warren Buffett — the Oracle of Omaha — is known for his value investing style. Many want to mirror the legend’s investing strategy and emerge as a winner, having navigated the turbulent financial and economic waters. Let’s delve deeper into Buffett’s final letter, and analyze his investing philosophy.
Long-Term Discipline Wins
Buffett reminds shareholders that Berkshire has fallen 50% three times in 60 years and always recovered. Buffett urged investors not to despair in such situations as “America will come back and so will Berkshire shares”. We expect this principle to hold good for several investing modes.
Market crashes are normal. Holding broad S&P 500 ETFs like S&P 500 (SPY - Free Report) , (VOO - Free Report) should reward investors if held for the long-term. Panic selling kills long-term compounding. Buffett’s advice for individual investors remains clear: in downturns, stick with your long-term investment plan.
Is Cash King If One Has Fewer Options to Explore?
Warren Buffett, now 95, has watched more market cycles than most. Berkshire Hathaway has massive cash pile, with about 31% of its portfolio held in cash and short-term Treasury bills, a record $381 billion.
His letter indicated that because of “Berkshire’s size and because of market levels, ideas are few – but not zero.” With market levels currently high, it is tough to find many undervalued options. Along with many investment houses like Motley Fool, we also believe that this shows that cash is still king.
Investors, who don’t have strong stomach for risks, can thus hold cash. Investors can play the cash-like ETF PIMCO Enhanced Short Maturity Active ETF (MINT - Free Report) , which is off only 0.14% this year (as of Nov. 13, 2025), while the ETF yields 4.72% annually (read: Cash Is King: Money-Market ETFs in Focus).
Diversification is the Key?
Buffett said in his letter that "in aggregate, Berkshire’s businesses have moderately better-than-average prospects, led by a few non-correlated and sizable gems.” Does it mean a portfolio of a non-correlated products wins? Is diversification the key to the success?
The ETF or the basket approach is a great solution in this case. All-cap blend ETF iShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) can be played here. Diversification offers better downside protection (read: Buy, Hold and Build Wealth: ETFs for Long-Term Investors).
Learn from Your Past Mistakes
Buffett wrote "My advice: Don’t beat yourself up over past mistakes – learn at least a little from them and move on. It is never too late to improve." Every cycle teaches a lesson that high growth stocks can crash fast. One should thus keep something in their portfolio that focuses on low-valuation, stable, and value stocks.
Even if AI is a hot concept, even if growth stocks rally hard on the tech boom or the easy Fed policy, one should not forget quality products. One should not put all eggs in one basket. Vanguard Value ETF (VTV - Free Report) , Invesco S&P 500 Quality ETF (SPHQ - Free Report) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) are some of the stable investments, in this regard.
Shareholder-Conscious Management: A Desirable Trait?
Buffett said “Berkshire has a more shareholder-conscious management and board than almost any company with which I am familiar (and I’ve seen a lot).”
Note that share repurchases are a common mechanism for companies to return value to shareholders and boost their stock prices. Plus, dividend hikes are another process to reward shareholders. Hence, Invesco Buyback Achievers Portfolio (PKW - Free Report) and ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) are the ETFs that can be tracked for shareholder value maximization.