Warren Buffett is the most successful investor of all time. He is also one of the richest humans on the planet. Mr. Buffett recently retired from his position as CEO of Berkshire Hathaway, he handed over the compounding reigns to Canadian Greg Abel. Berkshire shares rose 5,502,284% (5.5 million percent) during this six-decade, 60-year period. A $1,000 investment in Berkshire stock in 1965 would have grown to over $48 million by early 2026, whereas the same investment in the S&P 500 would have grown to roughly $400,000. Mr. Buffett’s wisdom has been shared often over the last few weeks, and the word that Buffett used and cherished the most was Compounding with a capital C. That said, in an interview with Becky Quick of CNBC, Buffett left us with the word ‘nice’. Why can’t we all just be nice. It’s free and you get it back.
It’s likely that there will never be another Warren Buffett. CNBC says that the 5 million percent return leaves Buffett unmatched.
The not-so-secret sauce (from the CNBC post) – The record was built on an unusually spare formula: use the insurance float as a source of low-cost capital, buy businesses with durable cash flows and allow time to do most of the work. That approach produced long-held stakes in companies such as Coca-Cola and American Express, while Berkshire expanded into railroads, utilities and manufacturing through wholly owned subsidiaries.
Berkshire is a conglomerate that holds many businesses. Buffett’s big idea is to hold many companies ‘forever’.
The two most powerful forces in wealth building (compounding) …
ABC = time + consistency
Time and consistency is a force of nature.
A river cuts through rock, not because of its power, but because of its persistence.
Compounding means adding to the businesses that you own. It’s the CEOs, management and employees who are doing the work for you. Together they are selling more of whatever they are selling and in turn creating more revenues, more free cash flow and more profits. As these businesses become more successful the stock prices increase. Your wealth grows atop these higher stock prices.
In the end it will come down to how the stock market makers price your collection of companies. The richest folks on the planet built successful businesses, the share prices carried them to the pinnacle of wealth creation.
You can join them, go on the same compounding journey. You can be a business owner with, and in all of the above.
The beautiful thing about investing in 2026 is that you can own just one fund and instantly have ownership stakes in all of the above companies, from Tesla, Google, Microsoft and Nvidia to Berkshire Hathaway.
These funds are called asset allocation ETFs.
To simplify, you will own the companies that make up the stock market of the U.S., the stock market in Canada, the stock markets in Europe and Asia, and so on and so on.
Here’s a post that should make that approach easy to understand – What is index investing? And in video form …
You can own an asset allocation ETF, you can build your own ETF portfolio, you can build a portfolio of individual stocks. That’s up to you. They key is to ABC.
Warren Buffett suggests that you do buy the market, embrace core index investing such as owning the S&P 500 (IVV) – 500 of the largest and most successful companies in the U.S.
Investing at all-time highs
I’ve seen this stat many time, but it caught my eye again this week.
Momentum and optimism is a powerful force. We can’t time the market fearing market tops, market middles, or near term market bottoms. We need to always be ABC’ing.
Markets don’t always go up. They can go sideways for extended periods. And that’s fine. We’re adding shares, building wealth at consistent prices. In 2023 when the markets had been range-bound for a couple of years I suggested –
The waiting is the hardest part, and the most profitable times for investors.
At times investors have to wait. We build and springload the portfolio waiting for the next aggressive move higher. In fact, these holding periods can be beneficial, we are loading up on stocks at stagnating or lower prices.
Dale
I gave some historical spring loading examples in that post. History did repeat of course. It didn’t take long for that compounding to be rewarded with returns over 21% annual.
And within the above period, we had a bonna fide market correction (20% or more) in the first quarter of 2025. On April 3rd, 2025 I encouraged you to enjoy those lower prices, really.
Apologies I missed the bottom by one day 🙂
Global equities (VT) are up 41% from that bottom, Canadian stocks are up over 48%.
Now I wasn’t trying to be a market-timing genius. I was just encouraging you to keep compounding.
I was coaching you through some market turbulence with some common sense gentle reminders. Once again, we’re always ABC’ing.
Big corrections can happen too …
“Our stock price will move capriciously, occasionally falling 50% or so as has happened three times in 60 years under present management,” he wrote. “Don’t despair; America will come back and so will Berkshire shares.”
Warren Buffett
So simple. So true.
Yes, you can be a very successful investor. You can build incredible wealth. As Warren Buffett reminds us, you don’t have to be a genius. You don’t even have to know how to read a company’s balance sheet. Be patient, be consistent, let time do its thing.
Making sense of retirement
And while protecting your wealth and turning your wealth into lasting income is more intricate, the good news is that with just a few key key strategies and tools, you can do retirement right. It’s not that difficult.
At Retirement Club for Canadians you’ll learn the simple strategies that set you up for retirement success. Use Contact Dale in the top right corner of this page if you’d like to join us for a Zoom Call Tour of Retirement Club – this Monday January 19th at 7 pm EST.
We have room for just several more members for Retirement Club 2026.
The Sunday Reads
At Findependence Hub, and on point, how to stay calm and invest confidently amid stock market fluctuations.
Yesterday on this blog I took a look at how Venezuelan oil might disrupt the Canadian oil and gas sector. Or, will our oil majors benefit from the instability?
At Early Retirement Now, more of an advanced class on diversification.
At Stocktrades, Dan goes over the RRSP, TFSA and FHSA basics.
And congrats to Rhys at Well Built Wealth who built a YouTube Channel to impress his kids, but now has 100,000 followers. Dad jokes aside, the channel is a wonderful resource. It’s one of the top retirement sources, and one that helped to build Retirement Club. We essentially package up all of the best of the best and most useful ideas and offer it up in one location.
As always, we’ll take a look at Dividend Hawk’s portfolio news and events for the week. Things are about to get busy as earnings season arrives next week, south of the border.
A Canadian investor who follows the ABCs – GenYMoney and her 2026 goals.
Bob at Tawcan is also looking ahead to see what 2026 might have to offer. Yes, of course Bob is a prolific ABC’er.
Here’s some of the math on RRSP vs TFSA from Aravind Sithamparapillai From that post – –
So in essence – if the investments grow at 6% per year for 30 years as an example in both cases we would have:
From canajunfinances some helpful tips on financial stress and losing sleep.
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Here’s Canada’s top-performing Robo Advisor, Justwealth. You can get advice, planning and low-fee ETF portfolios all at one shop. Canadians can have it all.
Consider Justwealth for RESP accounts. That is THE option in Canada with target date funds that adjust the risk level as the student approaches the College or University start date.
OUR SAVINGS ACCOUNTS
Make your cash work a lot harder at EQ Bank. RRSP and TFSA account rates are at 1.50%, other savings rates up to 2.75%. You’ll find some higher rates on GICs up to 3.85%. They also offer U.S. dollar accounts at 2.75%. We use EQ Bank, they have been awesome.
OUR CASHBACK CREDIT CARD
We make between $40 to $70 every month! And that’s on everyday spending. There are no fees with …
The Tangerine Cash Back Credit Card
For December we received $56.56 in cash from everyday spending. You can select 3 categories for 2.0% cash back. Remaining categories pay up at 0.50%.
That cash went into my TFSA account to help buy some CBIL-T, CHPS-T and bitcoin. I always top up the cashback and make a few investments.
Join Retirement Club 2026
Do retirement right. … a series of monthly Zoom Presentations, newsletters, plus a secure and private online space where we learn, share ideas and connect with members. Here’s the Retirement Club overview page. There are just a few spots remaining for the 2026 retirement-changing sessions. You can join us for a Zoom Tour of Retirement Club on Monday January 19th at 7 pm EST.
Hit Contact Dale at top right of this page for details.
We’ll take you through the three pillars of Retirement Club.
Make sure you’re doing retirement right. It’s also suitable for those who are approaching retirement, we need to prepare in advance and understand what we’re ‘getting into’.
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