It’s no secret that the American economy has had good times and some, well, not so good times. The most recent recession for our country was nearly a decade ago, though there are plenty of lessons learned during that time to keep in mind today.
In fact, Warren Buffett, one of the most famous investors of our time, has quite a bit of advice to share in regards to making American investments. First published in the New York Times back in 2008, Buffett wrote his own editorial piece sharing some insight and advice regarding his personal portfolio. The piece was titled, “Buy American. I am.”
In the article, Buffett explains that because of attractive pricing his personal investment portfolio would soon be 100% America. Taking a look at his latest portfolio, I’d say he continued in that same direction— but why?
Buffett answers this rather simply, with one of his most famous pieces of advice: “A simple rule dictates my buying,” he declares, “Be fearful when others are greedy, and be greedy when others are fearful.”
We all know that Buffett looks towards long-term investments. He is not the type of investor to look for something that will generate him a profit quickly, he is much more interested in having a stake in a company that he can continue to have forever. With that idea in mind, here is what Buffett has to say about American investments:
“Fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10, and 20 years from now….”
If you’re looking to generate a short term profit, you probably shouldn’t be looking towards Warren Buffett for advice.
“I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month— or a year— from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up.”
Perhaps he is a little bit biased and holds America in really high regards, but I like what Buffett is getting at. He genuinely believes that this country is so great that we don’t need to worry about our long-term economy.