Warren Buffett: This is how investors should position themselves in times of war

• Uncertainty due to the Ukraine war
• Warren Buffett recommends stocks
• Buffett believes that America overcomes all crises

Investors hate uncertainty. And Vladimir Putin is currently causing a great deal of uncertainty with his invasion of Ukraine, because he is destroying a decades-old peace order. In response, the US, in coordination with the EU and other allies, imposed very tough sanctions on Russia, including on the largest banks and the Russian central bank. However, according to statements by Western politicians, the consequences for the country’s own economy are not yet foreseeable.

Against this background, many investors are wondering how they should now position themselves. At the age of 91, investment legend Warren Buffett has had a lot of experience with crises. Therefore, it is certainly worth reading his advice on this. “Markets Insider” has therefore compiled some statements that the star investor has made on the subject of serious crises on previous occasions.

Buffett warns against depreciating money

“Be fearful when others are greedy and be greedy when others are fearful,” Warren Buffett said. Buying stock of what he thinks is doing well when the market is panicking about selling it is a contrarian trading approach that the Berkshire Hathaway CEO has had a lot of success with over the years. That’s why he declared in March 2014 that the Russian military action in eastern Ukraine did not persuade him to sell shares. In fact, the opposite is the case: “When stocks get cheaper, the likelihood that I’ll buy them increases,” says Buffett. This applies even if the conflict escalates into a new Cold War or even World War III.

One thing Buffett is certain of is that if a major war broke out, the value of money would decline. “I mean, that’s happened during practically every war that I know of,” says the star investor. “Therefore, having money would be the last thing I would want during a war.” The US dollar would then also lose value, ie consumers would be able to buy less with it. Therefore it is much better to own productive assets than pieces of paper or bitcoin.

Stocks better than gold

As Buffett revealed in a 2018 shareholder letter, he bought his first shares at just 11 years old in the spring of 1942, when World War II was in full swing. If he had invested $115 in a fee-free S&P 500 index fund, including all dividends since then, he would have accumulated assets of $607,000 by 2019, the billionaire calculates. On the other hand, if he had invested the same amount in gold, the value would only have grown to $4,200. Stocks are also a much better investment than gold, concludes the Oracle of Omaha. This example also clearly shows Buffett’s long-term investment horizon, who once said, “My favorite holding period is forever.”

Referring to investing in stocks in 1942, Buffett explained, “All it took was to believe that America would do well over time and overcome the current difficulties.” He added: “It wasn’t necessary to choose winning shares.” And further: “You didn’t have to identify the right time for profits or anything like that. You basically only had to make one investment decision in life”.

Warren Buffett backs America

According to Markets Insider, at the Berkshire shareholders’ meeting in 2020, Warren Buffett once again reaffirmed his firm belief in America’s long-term opportunities: “I was convinced during World War II, I was convinced during the Cuban Missile Crisis, at 9/ 11 and also during the financial crisis – that basically nothing can stop America”.

The American miracle has overcome all problems and will continue to do so, according to Buffett. The Wall Street legend admitted that the civil war, the Great Depression and the COVID-19 pandemic interrupted development in the USA, but ultimately the country always emerged victorious. “Never bet against America,” is the conclusion of the star investor.

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