How To Become A Successful Investor

While Buffett recommended that investors have equity exposure in his letter, the Oracle of Omaha also recommended having some short term government bonds. How much bond exposure (and what type of bond) an investor should have depends on his/her age and investment goals. In that regard, the iShares Barclays 1-3 Year Treasry Bnd Fd (NYSE:SHY) could potentially fit the bill as the ETF seeks ‘investment results that correspond generally to the price and yield performance of the Barclays Capital U.S. 1-3 Year Treasury Bond Index, which measures the performance of public obligations of the United States Treasury that have a remaining maturity of greater than or equal to 1 year and less than 3 years’. With that said, for those investors who want to follow Buffett’s advice more closely, there are U.S. government ETFs that have even shorter duration than iShares Barclays 1-3 Year Treasry Bnd Fd (NYSE:SHY). Investing in government bonds won’t make investors rich, but it will preserve wealth and reduce a portfolio’s volatility. Having shorter duration bonds won’t yield as much, but there will be less interest rate risk if rates normalize.

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