ETF Investing Lessons From Warren Buffett

Billionaire investor Warren Buffett turned 87 on Wednesday. And on the occasion, he shared a many investment tips in interviews. With Buffet’s Berkshire Hathaway Inc. BRK-B gaining over 108% over the last five years against the SPDR S&P 500 ETF’s (SPY - Free Report) advancement of 70.5%, it is many people’s dream to follow his investment ideas. Below we highlight some.

Be Big on Bank of America

Warren Buffett's Berkshire Hathaway turned out to be the largest shareholder of Bank of America (BAC) by “exercising crisis-era warrants to buy 700 million shares at below-market price” and locking in an $11.5 billion investment gain. Buffett’s interests on Bank of America puts BAC-heavy ETFs like iShares U.S. Financial Services ETF (IYG - Free Report), PowerShares KBW Bank Portfolio KBWB and Financial Select Sector SPDR Fund (XLF - Free Report) in focus.

Buffet Loves Apple

Buffett is outright bullish on Apple (AAPL - Free Report). In May, he indicated that the Apple stock is a buy candidate as consumers ‘want the product’ despite its prices. On August 30, Buffett told CNBC he hasn't ever “sold a share of Apple.” Berkshire first tapped Apple shares in 2016 and has garnered about 130.2 million shares of the tech giant, as of June 30, 2017.

Investors intending to follow Buffett and be part of Apple’s growth story, can play ETFs like iShares Dow Jones US Technology ETF IYWSelect Sector SPDR Technology ETF (XLK - Free Report) and Vanguard Information Technology ETF (VGT - Free Report) .

IBM Falls From Buffett’s Favor

Buffett is now less confident about its one-time favorite International Business Machines Corporation (IBM - Free Report) shares. Berkshire possessed about 81 million shares of IBM at the end of 2016 but cut down its positions to about 54 million shares in the first and second quarters of 2017, as per an article published on thestreet.com (read: Forget IBM, Buy These Thematic Tech ETFs Instead).

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