I’ve been buying American stocks
So says Warren Buffett who, according to CNBC, has for almost six years been close to 100% out of equities (except for his Berkshire Hathaway investments. In his Op Ed piece in the NY Times today, which is a must read, Buffett says:
Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors.
He goes on to say that bad news is a good thing for an investor as it provides opportunities to buy into the future at marked-down prices. And that taps into the long term where things will be positive. In a succinctly put lessson on long-term investing, he says that people who are in cash are actually holding a depreciating asset as inflation will increase. While he acknowledges that he does not know what the equity markets will do in the short term, in triue long term investor mode he says:
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”
He concludes with:
What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
Market timing never works for most people. They do not have the information that traders do and even the traders struggle to get it right most of the time. Good fundamentals, a solid investment plan, and if you are a long term investor investing for the long term is critical.
What say you?
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