It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price


Warren Buffett Signature

Warren Buffett is particularly eloquent in explaining the nuances of wise investments and here his focus on investing in value rings true.

In fact, if you invested $10,000 in Warren Buffett’s fund in 1964 it would be worth more than $240 million today.

This is not by being lucky, or particularly shrewd, but instead, by simply sticking to a simple and effective investment strategy: stay invested through good and bad times.

Investment Example Back The Dot Com Bubble Back The Dot Com Bubble
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Stage invested through the good and bad times

If you had picked the worst time to invest in the UK stock market by investing £1,000 in January 1973, by the end of 1974 your investment would have fallen to an eye watering low of £350.

However, by the end of 1975 it would be back to £870 and by January 1978 it would have been worth £1,333. While this is an extreme example of an investment made purely in the UK stock market it illustrates that had you sold when things were at the bottom, you would have missed the chance to make the loss back up.