Why you can’t just mirror celebrity investors – and what to do instead

Some celebrities are very well-known for their investments into real estate as well as stakes in businesses or cryptocurrency – and also, some professional traders and investors have become famous for their financial acumen. But there are major differences between the way celebrities invest and how professionals operate, so in this article we will compare and contrast their strategies and methods for making money. We’ll also share some of the lessons that can be learned from successful traders and investors, including celebrities. 

The world’s most successful investors and traders

We’ll start with an overview of the activity of some of the world’s most successful and famous investors and traders, who are not technically celebrities but in some cases, household names.

Investors

Warren Buffett is one of the world’s most famous investors, and in some of the biggest financial sector news so far this year, he announced in March that by the end of the year he will have stepped down as chief executive of Berkshire Hathaway. He bought the company in 1965 when it was a textile manufacturer and transformed it into a very successful holding company with a broad portfolio of businesses and minority investments in others. 

Berkshire Hathaway’s portfolio is worth $260 billion. Right now, its main holdings in shares are Apple Inc., American Express Co, Bank of America Corporation, Coca-Cola Co and Chevron Corp.

Bill Gates 

Bill Gates, as well as co-founder of Microsoft, is famous for his portfolio of investments. He is chair of the Gates Foundation, the third largest charitable foundation in the world. The foundation’s portfolio is worth $45.4 billion. The stock it holds the most of is unsurprisingly Microsoft, but after that its main holdings are Berkshire Hathaway, Waste Management Inc., Canadian National Railway Co and Caterpillar Inc. 

Ray Dalio 

Ray Dalio, the billionaire founder of Bridgewater Associates – the world’s largest hedge fund – stepped down from management in 2022. Though no longer co-chief investment officer, he remains an influential figure in global macroeconomic investing. Its portfolio of investments is worth $26.4 billion. 6.6% of the portfolio is comprised of shares in the SPDR S&P 500 ETF Trust. The next two biggest holdings are the BlackRock iShares Core S&P 500 ETF and Alphabet Inc. class A shares. 4.8% of funds are allocated in Nvidia Corp.. 

Traders

John D Arnold 

The billionaire John D Arnold is a very successful commodities trader, specifically trading energy and natural gas, having been described previously by colleagues at Enron as The King of Natural Gas. Founded in 2002, he managed the firm Centaurus Advisors, LLC until its closure in 2012 when he retired aged 38.

George Soros 

George Soros is very well known as an investor but he is one of the world’s most famous Forex traders, as the manager of Quantum Fund. He is known as ‘the man who broke the Bank of England’ thanks to short selling the British Pound Sterling in 1992, predicting the government would soon devalue it, and making an estimated $1 billion profit. Short selling currency is a tactic he has repeated, also shorting the yen in 2013.

Celebrity portfolios 

Websites that show you the breakdown of public figures’ investment portfolios are a fantastic resource that can show you options for assets you might like to invest in yourself. However, it’s harder to find definitive information about what celebrities invest in – part of the reason for this is that they tend to invest in private companies, meaning that this information is not publicly available. They are likely to invest in startups or young companies that they – or their financial advisors – perceive as viable moneymakers, or which align with their brand or values. 

One of the most famous celebrity investors is Ashton Kutcher, who started investing alongside his acting career in 2009 – he was an early investor in Skype and Airbnb, and more recently has bought shares in OpenAI. 

Serena Williams set up her own venture capital firm, Serena Ventures, in 2017 which she uses to invest in early stage companies, particularly those founded or led by women and people of colour. Some of the most well-known companies that have received funding from Serena Ventures include weight loss app Noom and ed tech company MasterClass. 

The difference between celebrities and professional traders and investors

There are several differences in the strategies employed by most celebrities with investment portfolios, and professional investors and traders, including their goals, strategies, and level of involvement.

Professional investors tend to focus on long term growth, assessing companies and the wider markets using fundamental analysis. They often work as fund managers (like Ray Dalio) and aim for steady returns over the years. Their risk management is structured, with diversified portfolios and performance measured against benchmarks.

Professional traders, in contrast, seek short-term profits through active trading. They often work at trading firms, using technical analysis to help them make fast decisions about what positions to open or close. Their time horizon ranges from minutes to weeks, with strict risk controls and performance tracking.

Celebrities tend to aim to grow their wealth by diversifying their investments to spread their capital into different industries, as well as to build their personal brand. Their investments can often focus on trend-driven sectors like tech or lifestyle brands. In many cases, they rely on advisors or partners and take a passive or opportunistic approach (although there are some celebrities who seem to take a more active role in managing their portfolios). 

Broadly speaking, investors focus on long-term value creation, traders prioritize short-term opportunities through rapid market movements, and celebrity investors often pursue brand-aligned investments with delegated management.

Why are there so many more celebrity investors than traders?

Cash rich, time poor: Celebrities often prefer long-term investing to active trading because investing requires less time and day-to-day involvement. They can also leave decisions in the hands of trusted financial advisors. On the other hand, active trading requires both constant day-to-day involvement (especially day trading) as well as extensive financial sector knowledge and technical skills. 

Crypto is an exception: Cryptocurrency is one area where you can see more celebrities engaging in active trading. The level of hype and excitement around crypto has drawn famous figures like Snoop Dogg and Elon Musk into taking an active role, with Snoop Dogg favoring cryptocurrencies as well as NFTs in the past few years. In fact, this year Snoop Dogg created his own channel on Telegram, a platform that’s very popular with the crypto community.

Brand-building and social impact: Investing is a way for celebrities to position themselves as entrepreneurs, as well as giving them a way to support socially conscious ventures that align with their image.

The risks of mirroring celebrities 

It’s not possible for most people to copy the investment decisions of the rich and famous, because celebrities have a much higher risk tolerance – they are able to put a great deal more of their capital into investments without worrying about losses significantly affecting their lifestyle. 

Their high net worth also means that they often typically employ different tax strategies to most people, making it hard to directly copy their investing style in a way that would work for the majority of retail investors. 

Unlike typical retail investors, celebrities – as well as professional investors and traders – often have access to exclusive deals, or are able to get on board investing in a company at a very early stage, before it goes public.

Celebrity involvement in a certain asset or industry might drive short term price spikes that mislead retail investors into thinking a certain company is going to continue to grow in value, when it’s in fact about to crash. Crypto is infamous for crashes, with celebrities endorsing a certain token one day, before it dramatically drops in value the next, often playing out in real time on social media. 

Lessons to be learned 

One lesson that can be learned from celebrity investors is that it’s viable to outsource part of your investing. While many people will not have a financial advisor that they can delegate this decision making to, ETFs that offer exposure to a variety of different companies at once are very popular. 

The most successful investors and traders, whether they are celebrities with financial advisors, or financial professionals themselves, all have one thing in common: they diversify their portfolios. At Alpari, we offer a wide range of markets you can choose from, with Forex for those interested in trading currencies, as well as the opportunity to trade commodities, metals, indices, stocks and crypto as CFDs (contracts for difference).

If you’re interested in outsourcing part of your investing, with the Alpari PAMM service you can follow the strategies of top-performing, experienced traders while remaining in total control of your money. Simply browse the leaderboard of traders and choose whose strategy you would like to follow based on ROI and other factors, like the performance fee set by the manager. Withdraw your money at any time or reallocate it to another PAMM manager whenever you like. 

Conclusion

While professional traders and investors – as well as celebrities with strong investment portfolios – can offer inspiring examples of how to grow wealth, it’s important to never blindly follow celebrity endorsements or try to copy their portfolios exactly. 

Similarly, retail investors or those getting started in trading should be careful when taking inspiration from famous traders and investors, as they typically have a far higher risk tolerance and are able to put a far higher amount of capital on the line. 

Individuals should do their own research into the assets they would like to invest in or trade, as well as developing a solid understanding of their financial goals, risk tolerance and how much capital they are able to put towards their trading and investing.