5 Great Warren Buffett Quotes That All Retirees Should Read

Warren Buffett is widely considered to be the most successful investor of the modern era, having delivered total returns of more than 6,000,000% in about six decades at the helm of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B).

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Perhaps the most remarkable part of Berkshire's success is that Warren Buffett has largely achieved its success by following investment principles that aren't too complicated. And he's happy to share his wisdom with everyday investors.

Although Buffett has given investors hundreds, if not thousands, of valuable quotes over the years, there are some that are particularly important for retirees to pay close attention to.

Learning from the Oracle of Omaha

Without further delay, here are my five favorite Buffett quotes for retirees I've heard over the years, in no particular order.

1. "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes."

This may sound like an odd choice if you're already retired, as you may not be thinking about what a certain company is going to be doing decades into the future, and you won't want all of your money in stocks. However, even in his mid-90s, Buffett evaluates every investment as if he's going to hold it for a long time. A great exercise is to ask yourself if you'd be willing to buy a stock and hold on to it if you were only allowed to check your portfolio every year or two. If the answer is no, it might not be the best stock or fund to buy when you're retired.

2. "... don't try and drive a 9,800-pound truck over a bridge that says it's, you know, capacity: 10,000 pounds. But go down the road a little bit and find one that says, capacity: 15,000 pounds."

This means focus on companies that have stable cash flows or other factors that should allow them to emerge from recessions and tough economic environments relatively unscathed. For retired investors, limiting your downside risk while still maintaining an age-appropriate level of stock market exposure is a smart strategy. A margin of safety can come in many forms, but you can look at Berkshire Hathaway itself for some good examples -- lots of cash on the balance sheet, relatively low debt, owns recession-resistant businesses, has diverse revenue streams.

3. "Predicting rain doesn't count; building the ark does."

One of the most important things for retired investors to understand is that recessions, corrections, and market crashes will happen. Over the past 60 years, the S&P 500 has lost or gained as much as 38% in any given year.

However, it's not just enough to know that the market will be volatile. It's important to set up your retirement investments to weather the storm. Focusing on recession-resistant businesses, industry leaders, mature businesses, an appropriate level of fixed-income investments, and avoiding speculative investments are important. Consider how well Warren Buffett does this. Since the mid-1960s, the S&P 500 has produced negative total returns in 13 different years. Berkshire outperformed the S&P in all but two of them.

One important way to "build the ark" if you're retired is to gradually reduce your exposure to stocks over time. The often-used Rule of 110 says that if you subtract your age from 110, it will give you the percentage of your investment portfolio that should be in stocks (or stock-based funds). By this rule, someone who is 75 should have about 35% of their money in stocks, with the other 65% in fixed-income investments that provide income regardless of what the market or economy is doing.

4. "If you like spending six to eight hours per week working on investments, do it. If you don't, then dollar-cost average into index funds."

At The Motley Fool, we fully believe that investors can outperform the major indices by owning a well-constructed portfolio of individual stocks. But this requires time to research stocks and plan your portfolio, the knowledge of how to analyze investment opportunities, and the desire to do these things.

This absolutely applies to retirees. If all three of these things don't describe you, there's absolutely nothing wrong with using low-cost index funds for the stock portion of your retirement portfolio and simply keeping things on autopilot.

My favorite Buffett quote for retirees

So far, I've given you only four quotes. With the current stock market turbulence in mind, I wanted to wrap up this discussion with perhaps my favorite Warren Buffett quote of all that puts the power of long-term investing into perspective. He had this to say around the same time most of the investing world was panicked about the financial crisis in the late 2000s.

In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

To sum it up. Whatever our economy or nation goes through, it's likely been through worse at some point in the not-too-distant past. And even considering all that it has been through, the Dow Jones Industrial Average managed to rise by more than 17,000% over the course of a century.

If you're an older retired investor, you might not care too much about where the Dow Jones Industrial Average will be in a few decades. But the point is that if you've put your retirement savings in an age-appropriate mix of stocks and fixed-income investments, focus on owning rock-solid businesses with stable cash flows (or simply buying index funds), and perhaps most importantly, avoid speculative investments that you feel the need to check every day, you don't need to worry about any economic or political turbulence impacting your long-term retirement financial security.

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Matt Frankel has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.