Warren Buffett’s Buy and Hold Strategy: How to Build Wealth with Rule #1 Investing

“Our favorite stock holding period is forever.” – Warren Buffett Quote

I want to talk to you about some of the best advice I've ever received from one of my favorite investors, Warren Buffett. The key to successful investing is buying a great company when it's on sale and then holding it for long periods of time.

In this video, I explain why a buy and hold strategy can pay off for you in big ways.

Buffett’s approach is rooted in discipline and patience — two values that we also emphasize in Rule #1 investing. The secret isn’t chasing quick gains or timing the market. It’s about identifying wonderful companies with strong financials, trustworthy leadership, and a long-term competitive advantage — then buying them when they’re undervalued. That’s the Rule #1 way.

There's truly nothing on the planet that can produce wealth like a great company that you can buy equity in at a great price and hold.

Why Warren Buffett Recommends Holding

In a nutshell, if you bought Walmart when it was just getting going as a public company in the 1970's and it doubled it's growth rate every 4 years. In 32 years when you're ready to retire, Walmart has doubled 8 times.

What this means is, if you invested 10,000 dollars into Walmart, and 32 years later, when you're ready to retire your $10,000 has compounded into about $2,400,000. By literally doing nothing, you've turned $10,000 into $2.4 million. Compound growth rates are hard to understand, but once you understand them you'll get rich.

In his 2024 annual letter, Buffett emphasized the importance of patience and long-term ownership:​

"When you find a truly wonderful business, stick with it. Patience pays, and one wonderful business can offset the many mediocre decisions that are inevitable."​

This is the power of exponential growth through compound interest — and it’s one of the most underappreciated forces in investing. According to Albert Einstein, it’s the eighth wonder of the world. The key is to invest in companies that are compounding your money — not just their own earnings — over decades. But Rule #1 investors don’t invest blindly. We do the homework: evaluating a company’s big five numbers, calculating its sticker price, and waiting for a margin of safety before buying in. That’s how you minimize risk and maximize reward over time.

That's why buying and holding can be so powerful. Especially, if you start start investing early.

Rule #1 investing is about treating your money with the care it deserves. Rather than speculating on trends or short-term movements, you’re investing in businesses you’d be proud to own — even if the stock market closed for the next 10 years. That’s the wisdom behind Buffett’s “forever” mindset, and it’s a cornerstone of building lasting wealth.

Buffett also cautioned against speculative trading, likening the modern stock market to a casino:​

"The casino now resides in many homes and daily tempts the occupants."​

He advocates for a disciplined, long-term investment strategy—core tenets of Rule #1 investing.​

Invest Like Warren Buffett

If you are thinking about learning how to invest and prepare for retirement, join more for a webinar where I share with you how to invest like Warren Buffett and all of the other best investors out there. Investing is simple once you learn the basics. Click the button below to join my Transformational Investing Webinar.

Featured Photo Credit: Stuart Isett/Fortune Most Powerful Women/Flickr, used under a Creative Commons license.

**Editor’s Note (Updated April 2025): This article was originally published in 2016 and has been significantly updated in 2025 to reflect current examples and Rule #1 investing insights.