These 3 investing mistakes can put your retirement at risk

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After nearly seven decades of experience, investing legend Warren Buffett has accumulated more than $142 billion in personal wealth — and the Oracle of Omaha believes much of his success is based on his ability to avoid losing money.

Buffett has always advocated a long term investment approach — which is perhaps the reason why his strategies resonate with millions of people.

“You only have to do a very few things right in your life so long as you don’t do too many things wrong,” he once said.

With that in mind, here are 3 investment mistakes Buffett says you should avoid in order to secure your fortune for the long term.

Some investors fail to recognize the difference between a speculative asset and an investment-worthy asset. According to Buffett, the difference is in how the asset generates a return.

“All investment is laying out some money now to get more money back in the future,” Buffett once explained. “Now, there’s two ways of looking at getting the money back. One is from what the asset itself will produce. That’s investment. [The other] is from what somebody else will pay you for it later on, irrespective of what the asset produces. And I call that speculation.”

Buffett believes that assets that produce income organically — such as farmland, profitable companies, dividend stocks and real estate investment trusts — are investment-worthy.

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Market timing is tempting but deceptive. Investors often convince themselves they can wait for the right time to buy or sell a stock. However, experienced investors understand that market cycles are unpredictable, so staying invested for longer is typically the best approach.

“You shouldn’t buy stocks unless you expect to hold them for a very extended period and you are prepared financially and psychologically to hold them,” Buffett had said during Berkshire Hathaway’s annual meeting in 2020.

If you are investing for retirement, you need to make sure you are picking the right stocks. Also, you need to make sure you are planning correctly to meet your short-term goals without having to cash out your portfolio.

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Real estate has historically been less speculative than stocks, with stable returns generating a steady stream of passive income. It is often touted as one of the best avenues to build wealth — a move that can pay off brilliantly for your retirement.

However, with home prices steadily increasing over the past few years, direct ownership of residential real estate might be challenging.

But that doesn’t mean you can’t tap into the $30 trillion home equity market, with real estate crowdfunding companies that let you invest in residential properties without constantly worrying about mortgage or home maintenance expenses.

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With both commercial and residential supply constrained, rental prices could be pushed higher, creating attractive returns for investors.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.