The Oracle Of Omaha Has Left The Building: Investing Lessons From The One & Only, Warren Buffett
Change is constant. For six decades, Warren Buffett—the Oracle of Omaha—was the face of Berkshire Hathaway Inc. (Berkshire) as CEO, but those days have ended. The 95-year-old has relinquished the reins and his handpicked successor, Canadian Greg Abel, now oversees the massive conglomerate. Mr. Buffett’s investing acumen is unmatched; he walks away as one of the world’s wealthiest individuals with a net worth of approximately $150B USD based primarily on his ownership of Berkshire shares.1
Mr. Buffett danced to the beat of his own drum. He eschewed a lavish lifestyle and famously doled out pearls of wisdom in his various letters as Chair of the Berkshire Board. Mr. Buffett often included investing advice designed for individual investors in his annual letter to shareholders. I shared many of these musings with my students during my days in the classroom; they provided timeless advice on both investing and life. To mark Mr. Buffett’s retirement as CEO, here are some lessons as captured in his shareholder letters. They are sorted thematically along with some takeaways for both young MoneySavers and those who are young at heart.
On Index Funds
One theme that Mr. Buffett discussed on multiple occasions was his belief that retail investors (and, for that matter, institutional investors, too) would be well served by investing using index funds. Over the long term, Buffett asserted that investors would be better off purchasing index funds as opposed to choosing mutual funds to gain exposure to the stock market. He believed that index funds would outperform a vast majority of mutual funds over the long term once fees and other expenses were considered.2
Buffett’s personal conviction was strong here. He shared that money left for his wife’s benefit as per his Will is to be invested as follows: 90% in an inexpensive S&P 500 index fund, with the remainder in a short-term government bond fund.3 He suggested that the long-term results generated by this strategy would beat those garnered by most individual or institutional investors (including pension funds) who rely on expensive professional money management.4
Takeaways: Mr. Buffett was adamant that most investors would be better served by choosing index funds as opposed to selecting mutual funds. Canadian data certainly backs this up. SPIVA® Canada Mid-Year 2025 results indicate that 97.6% of Canadian Equity mutual funds underperformed the S&P/TSX Composite Index going back a decade from the end of June 2025.5 MoneySavers know that using an index strategy is a wise long-term investment approach. Asset allocation Exchange-Traded Funds (ETFs), which offer “one stop” investment solutions based on factors such as investor risk tolerance, goals and age, are an ideal starting point for those looking to create appropriate investment portfolios to reach long-term financial goals.
On Market Timing
A recurring theme found in Mr. Buffett’s letters was his strong belief in the benefits of being a long-term investor. He was not interested in day trading or flipping stocks quickly to make a profit. When it came to investing success, his strategy involved building a portfolio of companies with growing earnings momentum and then holding those companies for many years.6
Additionally, he had no illusions about his ability to predict how the stock market would behave in the short- or medium-term.7 Rather than practicing market timing, Buffett vowed to invest the majority of his corporation’s assets in equities on an ongoing basis.8
Takeaways: MoneySavers know that market timing rarely works effectively over the long term. If Buffett didn’t have a crystal ball, then who does? When it comes to investing, there are three keys for long-term wealth accumulation: money invested, rate of return and time invested in the markets. For young investors who are striving to reach financial goals that are decades away, staying invested as opposed to practicing market timing is wise.
On Market Psychology
Another recurring theme for Buffett was that he had no illusions about the stock market continually operating rationally, and he laid the blame for this on human emotions. In theory, markets should be constantly filtering all information and pricing individual stocks perfectly. Buffett recognized that this was an ideal and that truly efficient markets don’t exist. He noted that stocks often change hands at values that are detached from reality, creating opportunities to buy the stock of great companies at depressed prices.9
Again, Buffett distanced himself from the idea that he had any predictive powers when it came to how stocks would move in the short- and medium-term. He did note that disconnects would occur occasionally between stock market valuations and market fundamentals. He attributed these circumstances to human nature, specifically fear and greed, and noted that being a contrarian (buying when others are selling en masse, and vice versa) during these bouts of market chaos was a goal.10 Despite this, Buffett cautioned investors against excessive trading, noting that this behaviour would surely decrease long-term investing returns.11
Takeaways: In the short term, markets can be swayed by any number of macro factors, such as political uncertainty. Micro events such as an earnings “miss” by a market bellwether can also move the market. In the long term, markets are relatively effective at valuing companies, but in the short term, they can be moved dramatically by investor psychology. As Buffett noted, fear and greed appear unexpectedly. Wise MoneySavers expect this, understand their own motivators and don’t panic when fear or greed takes hold of markets. One tangible way to self-test is to ask how a significant market crash (say, 30%) would impact you emotionally and how you might react; these market pullbacks have happened and will do so again. Perhaps trimming equity exposures is suitable. Remember, it’s always important to have a personal investment policy in place, which outlines an appropriate asset mix. Monitor your asset mix regularly and take action when components such as equity weightings drift outside preferred ranges. Importantly, this has likely been the case for many Canadians given the strong domestic and global equity results in 2025.
On Fees
Mr. Buffett was consistent in his belief that high investment fees cripple investor returns in the long run. He noted that these fees are constant regardless of whether or not performance is strong.12
Takeaways: MoneySavers know the importance of minimizing investment fees. A typical actively-managed mutual fund can easily have a management expense ratio (MER) of 2% compared with an index ETF MER in the 0.05% range. On a $100,000 portfolio, that equates to $1,950 in extra fees annually, and as Buffett pointed out, these higher fees are a constant. Bear in mind that a given mutual fund is virtually guaranteed to underperform the underlying index over the long term, ironically based in no small part on the performance drag caused by the higher fees. Those higher fees and underperformance are a nasty combination to be avoided at all costs, no pun intended.
The Last Words Go To Mr. Buffett
Warren Buffett will be remembered as one of the world’s most successful investors. His timeless “lessons”, as delivered through his much-anticipated annual letter to shareholders, provided invaluable insights into how to be a successful long-term investor. Well into his 90s, he commented that he still strongly embraced lifelong learning.13 Wise MoneySavers would concur!
Fred J. Masters, BBA, BEd, PQP, is the author of Lessons on Mastering Money: The Personal Finance Guide for Canadians in their 20s & 30s. He is the President of Masters Money Management Inc. and has given financial wellness presentations to all demographics in Canada, including university students and alumni. He is a retired professional educator, having taught senior financial accounting for decades. He is also a licensed mortgage agent with Mortgage InGenuity Inc. and can be reached at F.Masters@mastersmoneymanagement.ca. To find out more, visit www.mastersmoneymanagement.ca.
1 https://www.forbes.com/profile/warren-buffett/
2 https://www.berkshirehathaway.com/letters/1996.html
3 https://www.berkshirehathaway.com/letters/2013ltr.pdf (page 20)
4 https://www.berkshirehathaway.com/letters/2013ltr.pdf (page 20)
5 https://www.spglobal.com/spdji/en/spiva/article/spiva-canada/
6 https://www.berkshirehathaway.com/letters/1996.html
7 https://www.berkshirehathaway.com/letters/1986.html
8 https://www.berkshirehathaway.com/letters/2024ltr.pdf (page 7)
9 https://www.berkshirehathaway.com/letters/2022ltr.pdf (page 4)
10 https://www.berkshirehathaway.com/letters/1986.html
11 https://www.berkshirehathaway.com/letters/2005ltr.pdf (page 19)
12 https://www.berkshirehathaway.com/letters/2017ltr.pdf (page 12)
13 https://www.berkshirehathaway.com/letters/2024ltr.pdf (page 3)
This work contains the author’s opinions and ideas as related to the subject matter. The content is by no means designed to provide any reader with individual financial advice. Note that past performance is not a guarantee of future results when it comes to any specific investment or investment strategy. Always consult a competent financial professional for advice when it comes to making financial decisions. No guarantee is made with respect to the accuracy or completeness of the content.