Difference between Warren Buffett and an average investor.

Ever wondered why Warren Buffett is so open with his investing process? For most people, investing can open up a lot of doors for their future. With todays inflation scene in Canada, investing in a portfolio with diversified asset classes is the key to stay ahead. However, it can be challenging to build a strategy that gives you the highest success rate in achieving your goals for the future. Warren Buffett once said “We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” Let’s dive deeper into what Warren Buffett meant by that quote and why he said it.

Emotion Management:

One of the major reasons why having discipline while investing is so important is because as a human, your mind will always want to cut any pain out. When the market has a rough year like 2022, an undisciplined investor can easily get caught up in the frenzy and make impulsive choices based on short-term fluctuations. However, disciplined investors like Warren Buffett understand the importance of sticking to their investment plan and not being swayed by temporary market conditions.

Long-Term Perspective:

Investors should stay focused on what’s important, their goals, rather than chasing for a quick gain. Achieving your life goals is a lot more important than beating an index. Markets will inevitably experience ups and downs, but disciplined investors understand that short-term fluctuations are a part of the game. By maintaining discipline, investors can avoid making knee-jerk reactions to market volatility and stay committed to their long-term investment strategy.

To explain the above two points, let’s use an example, Amazon’s stock on Jan 3rd of 2000 opened at $4.07 a share. Just 2 years later, on December 31st 2001, Amazon stock closed at $0.55 a share. This means your amazon stock in that time period would have been down over 86%. As I am writing this article, Amazon shares are at $126.61 per share. This equates to over 3,000% increase on your Amazon shares.

Consistency is the key:

Successful investing requires a systematic approach, whether it's regularly contributing to an investment account, or rebalancing a portfolio on a once-a-year basis. By incorporating a consistent approach in your finances, you create habits that will eventually lead you to achieve the most important goal in life, freedom.

To be a successful investor like Warren Buffett, you don’t need to be the smartest individual, you just need to be the most disciplined when it comes to your finances. Understanding the importance of the above points will help you take the first steps towards successful investing. Click here to schedule a free 30 minutes consultation.

- Jai Gandhi, Associate Investment Advisor

Jai Gandhi is an Associate Investment Advisor at Endeavour Wealth Management with iA Private Wealth, an award-winning office as recognized by the Carson Group. Endeavour Wealth Management provides comprehensive wealth management planning for business owners, professionals and individual families.

This information has been prepared by Jai Gandhi who is a Associate Investment Advisor for iA Private Wealth and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained here in may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.

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