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The investment philosophy at Berkshire Hathaway is well known: Buy great businesses that are run by great people and keep them 'forever'. However, I believe Buffett/Munger have said that 'Buy and Hold Forever' may not be the best method for people with smaller amounts of capital.

So, the question is: What methods have they recommended for small investors?

[Please, in your answer, include the source/reference.]

Thank you for your time.

  • I have found what Buffett/Munger would have done if they were starting with small sums. Both would recommend using a modified Graham approach to select stocks. "...if I were working with small sums, I certainly would be much more inclined to look among what you might call classic Graham stocks." -Buffett (2011). "You're back to basic Ben Graham, with a few modifications" -Munger (2005) on how individuals may invest. – Flux Sep 26 '14 at 13:20
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Warren Buffett: 'Investing Advice For You--And My Wife' (And Other Quotes Of The Week):

What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit…My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors…

Similarly from Will Warren Buffett's investment advice work for you?:

Specifically, Buffett wants the trustee of his estate to put 10 percent of his wife's cash inheritance in short-term government bonds and 90 percent in a low-cost S&P index fund - and he tips his hat specifically to Bogle's Vanguard in doing so. Says Buffett: "I believe the trust's long-term results from this policy will be superior to those attained by most investors - whether pension funds, institutions or individuals."

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