Former Berkshire Hathaway CEO Warren Buffett shared pieces of valuable advice on wise investment during times of geopolitical turmoil. The legendary market player believes that one should buy more shares amid geopolitical upheaval as such investments are sure to bring high yields in the future.
Warren Buffett strongly recommends not to hold money in times of geopolitical crisis and refrain from purchasing gold or cryptocurrencies. The best solution for an investor is to buy shares. Notably, Buffett also voiced the same opinion in March 2014. At that time, he refused to get rid of shares against the background of the potential conflict between Ukraine and Russia. He was buying stocks that were rapidly dropping in price, while other traders were amassing cash under their pillow. He stressed that if there was an escalation of the conflict, shares would fall in price. This was a perfect moment to buy shares at favorable prices. The investor also added that he "wouldn't cash out even if the conflict escalated into another cold war or World War III." "Well, if you tell me all of that is going to happen, I will still be buying the stock."
"The one thing you can be quite sure of is if we went into some very major war, the value of money would go down — that’s happened in virtually every war that I’m aware of. The last thing you’d want to do is hold money during a war," Buffet pointed out. He remembered too well that the US stock market began to grow during the Second World War. In the spring of 1942, he bought his first shares at the age of 11. Back then, the US suffered serious financial losses during World War II.
Buffett bought 3 shares of Cities Service for $115. He said that if he had invested this amount in the S&P 500 Index Fund and reinvested all the dividends, he would have earned $607,000 in 2019. However, if he had panicked and bought 115 grams of gold instead of shares, its price would have risen to only $4,200. Buffet is also certain that the US will eventually overcome all the difficulties. "American businesses are going to be worth more money," Buffett said. "Dollars are going to be worth less, so that money won't buy you quite as much. But you're going to be a lot better off owning productive assets over the next 50 years than you will be owning pieces of paper," he added.
