The world’s fourth-richest billionaire of USA is investing differently during the coronavirus pandemic. Warren Buffet’s investment strategy during the crisis is admired by many. He chose to take out his money from airlines and invest in less affected stocks like gas supply and rail companies.
In the start, Warren Buffet’s company Berkshire Hathaway Inc faced losses in billions. However, Buffet advised investors to focus on long term holdings of its stocks and holdings. Previously Buffet in an annual letter to shareholders told that coronavirus is a ‘scary stuff’ for the US economy. He also warned that the share value of the company can be impacted negatively. Furthermore, he said that the economic situation of America is still strong yet softer. But he was still very positive at that time. He also predicted that during the market downtime the Berkshire can outperform by coming out of the crisis in a very safe manner.
Berkshire owns more than 90 businesses and was continuously gaining huge profits previously in 2018 and 2019. But during the first quarter of 2020, the company bears the loss.
Many accuse Warren Buffet that he remain silent during the crisis. However, in reality, he spokes much and his tune remains unchanged. Moreover, he said he sees economic fear in the eyes of investors and business owners.
Warren Buffet Investment Advice:
Warren Buffet advises people not to let daily news affect their investment practices. Try to have a long term point of view and invest according to that. Worry less and it is a far better path of wealth creation.
Daily ups and downs due to market unpredictability may save you a few bucks but in the long run, it will come the other way around to bite you. He urges not to consider share price rather check the overall value of the company. Check the company’s balance sheet and access future growth potential during current and future situations.
Currently, people are also thinking of buying bonds to play a safe move. However, the bonds in any case have fewer chances to give bigger returns when compared to stocks. So prefer to buy stocks.
Never use borrowed money to invest in stocks at these crucial pandemic times. Warren Buffet has experience of investing in stock but still, he warns the risks associated with it.