As investors worldwide nursed huge losses in the wake of US President Trump’s tariff wars last week, one escaped relatively unscathed.
Legendary investor Warren Buffett has seen his wealth grow by another $19 billion so far this year to a mammoth $161 billion.
Of the ten richest people in the world he is the only one to have grown his fortune, according to Bloomberg’s Billionaires Index.
Although the other nine enjoyed a recovery on Thursday when Trump announced a 90-day pause on higher tariffs for most countries, they all have less wealth than at the start of the year – except for Buffett.
So how has the 94-year-old investing guru done it – and how can we apply his secrets to success to our own portfolios as we navigate current market turbulence?
Warren Buffett, chairman and CEO of Berkshire Hathaway
1. He focuses on getting good value
Buffett’s most famous advice to investors is ‘to be fearful when others are greedy and to be greedy only when others are fearful’.
This is a big ask for investors. It can be stomach churning to go against the crowd and buy when markets are down and sell investments that are still rising in value.
But once again it has paid off. Warren Buffett increased the cash reserves of Berkshire Hathaway, the investment vehicle he founded and runs, to $334.2 billion by the end of last year because he thought company valuations were running too high.
He even trimmed his holding in Apple. Damien Fahy, founder of personal finance website Money To The Masses, says: ‘The sale of Apple shares drew criticism at the time, especially as Apple’s share price surged to all-time highs in late 2024, but is now being applauded. Apple’s share price has been among the hardest hit during the market slump.’ Fahy adds that everyday investors can learn valuable lessons here. Resist the fear of missing out when markets are soaring and don’t be afraid to take profits if you think an investment is overvalued or is starting to make up too great a proportion of your portfolio. Recognise that attractive value may be scarce, particularly among the largest, most-popular stocks.
2. Buffett doesn’t try to time the market
For anyone who gets frustrated that they struggle to call when financial markets have hit their peak – or dipped as far as they are likely to – here’s some consolation. Even the most feted investor in the world doesn’t attempt to.
Andrew Oxlade, investment director at Fidelity International, says: ‘Buffett doesn’t try to predict how markets will behave. Instead, he ensures he is ready if and when a fall does occur. In his words: ‘Predicting rain doesn’t count; building arks does.’ Ordinary investors don’t need to know when markets will fall, they just need to be prepared for when they do.
3. Only ever buying for the long term
Buffett famously said: ‘Our favourite holding period is for ever’. Berkshire Hathaway’s portfolio bears this out.
It has held shares in Coca-Cola for more than 35 years, American Express for 30 and credit ratings agency Moody’s for 23.
That means when market shocks come along, Buffett can drown out the noise and keep on going.
‘Last week may have felt awful and your pension may have taken a huge knock,’ says Darius McDermott, managing director of Chelsea Financial Services.
‘But if you still have decades until you retire, by the time you do the falls over the last few days will look like a blip. Much like Buffett does, the best approach is usually not to worry. Have a good strategy in place and keep going.’
Fund ideas
Warren Buffett at the premiere of The Post at The Newseum in in Washington, DC, in 2017
All investors can apply Warren Buffett’s words of wisdom to their strategy – whether they put their money into shares, funds, bonds or other assets.
If you really buy into his ideas, you can buy shares in Berkshire Hathaway, traded on most large investment platforms.
The original shares are currently trading for around $782,000, but the more affordable ‘B’ class of shares – which are effectively a fraction of an original A share – are trading for around $520.
Alternatively, you could seek out funds that are aligned with his philosophy. Laith Khalaf, head of investment analysis at investment platform AJ Bell, mentions Fundsmith Equity, which shares Buffett’s approach of buying for the long term. Top holdings include Facebook owner Meta, Microsoft, and pharmaceutical company Novo Nordisk. The fund is down 6.8 per cent over one year, but up 48.4 per cent over five.
McDermott’s choices include Liontrust UK Smaller Companies, which seeks out firms it believes have a competitive advantage over their peers.
Finally, although Buffett manages a fund himself, he advocates passive investing for ordinary investors. He suggests a low-cost fund that follows an index of the largest 500 companies in the US – the S&P 500.
Such funds are available to UK investors from providers including UBS, Vanguard and iShares which cost as little as 0.09 per cent in ongoing charges.
Even with the turbulence in recent days, an investor in the S&P 500 would have seen their holding rise by 2.6 per cent over the year, and 91.2 per cent over five years.
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