Warren Buffett warned Americans against cashing out stocks, pulling money from banks, or buying gold or bitcoin amid the escalating war in Ukraine.
And interestingly, his advice came in March of 2014, back when the possibility of the current tensions had only just begun.
“I will still be buying the stock,” he told CNBC that year. “You’re going to invest your money in something over time. The one thing you could be quite sure of is, if we went into some very major war, the value of money would go down.”
The current CEO of Berkshire Hathaway said that he would personally take advantage of “cheaper” stocks in the event of a crash. And even if the situation elevated into a Cold War or World War III, he still wouldn’t cash out.
According to him, the markets crashed during “virtually every war” that he could think of. And they always rebounded. So hoarding physical money out of fear has never proven to be a wise choice.
In fact, the billionaire made his very first fortune from a stock he bought during WWII at the age of 11. For $115, his investor purchased three shares of Cities Service in 1942.
Warren Buffett didn’t say how long he held on to those buys. But he did write in a 2018 shareholder letter that If he’d invested that sum into a no-fee S&P 500 index fund and reinvested all the dividends, it would have been worth $607,000 by 2019.
On the flip side, if he had feared a market tumble and bought $115 worth of gold instead, his fortune would have only grown to a measly $4,200.
Warren Buffett Says Assets Build More Wealth Than Cash
During his eerily accurate interview, Warren Buffett also went on to predict that businesses would be worth more, but the actual dollar would be worth less, which is always the case with inflation. So owning assets, such as stocks and buildings, would be the biggest payoff over time.
“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, or I might throw in bitcoins,” he noted.
In 2020, the financial genius once again spoke on the country’s ability to recuperate from nearly everything. And he believes that’s proof that no matter what happens, we’ll find a way out—both financially and emotionally.
“I was convinced of this in World War II, I was convinced of it during the Cuban Missile Crisis, 9/11, the financial crisis — that nothing can basically stop America,” said Buffett. “We faced tougher problems and the American miracle, the American magic, has always prevailed and it will do so again.”