The 45th President of the United States, Donald Trump, was officially sworn in last week. While the statements he made during his campaign initially made the markets surge in preparation for fewer regulations, his inaugural address left some a little worried about where President Trump will stand as far as businesses are concerned, and what he will do.
As he is the most controversial president in recent history, it’s understandable that many people are a little worried and uncertain of what the future will bring; and businesses and investors will undoubtedly be watching the White House closely. However, in the wake of the massive amounts of concern and excitement about President Trump’s potential, there are a few things that genius investor Warren Buffett recommends for those looking to invest during this tumultuous presidency.
Invest for longer periods
When there is uncertainty, the best bet is to invest with the expectation of longer returns. Buffet always says that his “favorite holding period is forever” which, while not entirely true, showcases how he believes that the big picture is the best way to go. While you probably don’t know where the market will be in the next few days or even years, if you invest with a 10 year minimum in mind, the chances of your investments paying off is much higher.
Don’t worry about the market being ‘expensive’ or ‘cheap’
Since you’ve already admitted that you don’t know where the market is going, and you’re in it for the long haul, the next most important thing is to evaluate each individual company that you buy. Don’t focus on the market itself; instead invest in good companies that you believe will do well and go from there.
Don’t buy all the stock you want at once
Because it’s so impossible to predict exactly where a given stock will go in a short period of time, Buffett recommends dollar-cost averaging. With this method, you can spend a smaller initial amount, check to make sure the stock is going where you want, and minimize the risks. This goes in line with Buffett’s preference for spending a fair price on good companies instead of buying bad companies at a cheap price.
Invest in an index fund
If you’re still a little nervous about the stock market and what it’s going to do, Buffett recommends investing in a low-cost S&P 500 index fund (he frequently recommends Vanguard) as it is both a on American businesses, has a decent average annual return, and takes some of the pressure of weighing stocks away from the person.