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He started out with $9,800 in savings after college. He’s now worth a staggering $150.2 billion, making him the 10th richest person in the world.
That’s Warren Buffett. His secret? Not luck or risky bets, but a consistent, long-term approach built on simple financial rules.
His strategy isn’t built on hype — it’s built on patience, discipline and a handful of fundamental principles that have stood the test of time.
The best part? These aren’t strategies reserved for billionaires or Wall Street insiders. They’re practical rules anyone can follow, whether you’re investing your first $1,000 or managing a six-figure portfolio.
Here’s how you can apply Buffett’s timeless advice to your own finances.
1. Let compounding work its magic
Buffett’s secret weapon isn’t timing the market — it’s time in the market.
“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever,” Buffett famously wrote in a letter to shareholders in Berkshire Hathaway’s 1988 annual report.
One of the most powerful aspects of compound interest is that it works quietly in the background, requiring minimal effort from the investor. It allows your investments to grow on top of themselves over and over again — like a snowball gaining momentum.
The trick is to start early, automate your savings and think long-term.
At just 11, Buffett bought his first stock — three shares of Cities Service at $38 each. When he sold at $40, the price soon soared, teaching him an early lesson: real wealth doesn’t come from quick trades, but from patience and the power of compounding over time.
One simple way to harness the power of compounding is to set up regular, automatic contributions that take the guesswork out of saving and keep your portfolio growing over time.
That’s where a platform like CIBC Investor’s Edge can make a real difference.
With a Regular Investment Plan, you can schedule automatic purchases of stocks, exchange traded funds (ETFs), or mutual funds at intervals that suit your budget. It’s a simple way to stay disciplined — investing a little at a time, without having to watch the market or stress over timing.
Because it’s a self-directed account, you stay in control of every decision, from what you invest in to how often you contribute.
Enjoy low commission fees of $6.95 per trade and no annual fees for the first year. Investors who make over 150 trades in a quarter fall in the active trader category — and can enjoy a discounted commission rate of $4.95 per trade for stocks and ETFs.
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2. Buy low-cost S&P 500 Index Funds — consistently
Warren Buffett has long advocated for the S&P 500 index fund as one of the smartest, most cost-effective ways for everyday investors to build wealth. This simple strategy offers broad exposure to America’s leading companies, balancing growth potential with diversification and reduced risk.
“I think it makes the most sense practically all of the time. Keep buying it through thick and thin, and especially through thin,” Buffett stated.
The results back him up. Over the past 50 years, the S&P 500 Index has demonstrated a strong track record of performance, with recent annual returns of 26.29% in 2023, 25.02% in 2024, and a steadier 14.47% so far in 2025.
Even professional investors often struggle to outperform this index over time.
Following Buffett’s strategy is easier than you might think. With a self-directed trading account from CIBC Investor’s Edge, you can regularly invest in low-cost S&P 500 ETFs within tax-advantaged accounts like an RRSP, TFSA or FHSA.
Your money can grow more efficiently — and if you hold over $10,000 combined across registered and non-registered accounts, you’ll pay zero annual fees.
No matter your goals, the right investments can help you reach them. Even if you’re doing it yourself, you’re never investing blindly — just like Warren Buffett.
Read more: Here are 5 expenses that Canadians (almost) always overpay for — and very quickly regret. How many are hurting you?
3. Focus on long-term value — not short-term noise
“Be fearful when others are greedy, and greedy when others are fearful,” Buffett wrote to shareholders in Berkshire Hathaway’s 1986 annual report.
When markets tumble, fear takes over, prompting many investors to sell. Buffett, however, takes the opposite approach. He buys high-quality assets at discounted prices during times of fear, confident that their actual value will appreciate over the long run.
You can adopt a similar strategy by diversifying your investments across various assets and resisting panic-driven decisions during market fluctuations.
With CIBC Investor’s Edge, building a diversified portfolio is straightforward. You have access to:
- Stocks
- Exchange-traded funds (ETFs)
- Options
- Mutual funds
- Guaranteed Investment Certificates (GICs)
- Fixed income investments
- Precious metals
- Initial Public Offerings (IPOs)
- Structured notes
Get 100 free trades when you open a CIBC Investor’s Edge account using promo code EDGE2526. Plus, get $150 or more cash back.† Offer ends March 31, 2026.
Building a diversified portfolio allows you to follow Buffett’s timeless advice to savvy investors: focus on long-term value, not short-term noise.
4. Only invest in what you understand
Buffett has a simple golden rule: “Never invest in a business you cannot understand.”
If he can’t easily explain how a company makes money or what gives it a competitive advantage, he stays away.
You can take a similar path by removing the guesswork from your decisions.
CIBC Investor’s Edge gives you access to expert analysis, investment research and trackers that are specifically designed to help you invest with confidence.
Whether you’re just starting or already trading actively, CIBC provides tailored resources for both beginners and advanced traders.
Start with the basics through their Investing 101 guides — and when you’re ready, take advantage of their advanced trading tools and research to inform your strategy.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.