There is no doubting the long-term investing genius of Warren Buffett. The Oracle of Omaha has been around for many decades, and has lived through nearly every financial crisis of the past century. Investors starting out over this past decade may not have experienced one market crash. Millennial investors who started investing after the financial crisis of 2008 may thus be ill-equipped to deal with such a scenario playing out in the near-term.
Whether or not a stock market crash is on the horizon is less important than considering how one’s long-term strategy is aligned with their current portfolio. Growth investors have prevailed over the past 10 years, and many growth stocks continue to see valuations expand while value picks lag the broader market.
Momentum strategies have resulted in investors chasing returns, and being successful doing so, with investors like Buffett seemingly “losing their touch.”
I think such a view is a dangerous one, and do think when markets correct, investors will start flocking to the investment strategies that have worked over the long-term. Those who invest like Warren Buffett in high-quality companies with durable competitive advantages at prices that make sense may underperform now.
That said, over the long run, the proven effectiveness of such strategies will be proven. There’s nothing wrong with under-performing the market right now, and outperforming over the long term. Investing is a marathon, not a sprint, so focusing on long-term returns over and above short-term performance ought to be the focus of investors right now.
Invest wisely, my friends.
