Taking Warren Buffett & Your Portfolio to the Next Level

July 26, 2018

Taking Warren Buffett & Your Portfolio to the Next Level


In this article (click here), Warren Buffett, one of the greatest investors of all time, shares strong and insightful recommendations regarding your investment portfolio.

In sum:

  • Warren strongly promotes keeping your costs low
  • He believes that you reduce risk (and increase return) by simply owning the whole market at a low cost (as opposed to paying substantially more for a subsection of the market that typically underperforms over time)

While we at True Wealth Advisory Group agree wholeheartedly with the Great Warren, we would improve upon his recommendations in two key ways:

  • Go Global: While Buffet and another great, John Bogle, tout the merits of the S&P 500; it is important to also include small and mid-cap U.S. equities as well as non-U.S. equities.  After all, the S&P 500 is about half the world stock market.  Why leave out the other half?  While U.S. equities have certainly pounded their non-U.S. counterparts over the last decade, we would submit that trend will likely reverse at some point (perhaps it has already as – the U.S. underperformed in 2017); also, small caps are the big winner thus far in 2018.  So, make sure your non-U.S.-large-cap allocation (ie. international and small/mid caps) is substantial and thoughtful.
  • Pay Less Taxes: While we are pleased at the continued trend and especially the recent surge in low-cost whole market investing, most investors are still leaving substantial money on the table.  By using systematic, perpetual tax loss harvesting tools, one can greatly reduce their taxes (hence greatly increasing their potential portfolio gains).  Remember:  it’s not what you make, it’s what you keep!  We predict that this powerful and time-tested yet surprisingly underutilized approach will enjoy tremendous participation and popularity in the years to come (if the IRS is going to give you a tax arbitrage on a silver platter, you should consider taking them up on it!); maybe Warren will add this to his talking points soon.  More importantly, if you are one of the many who do not take full advantage of this now, I strongly suggest you contact us (click here) to learn more!