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Yahoo
09-05-2025
- Business
- Yahoo
Warren Buffett is sitting on a record amount of cash — here's why you may not want to follow suit
Warren Buffett is well known for his investing talent, as the billionaire got very rich through buying undervalued stocks and holding them for the long term. It may come as a surprise, however, to learn that Berkshire Hathaway — the multinational conglomerate he runs — held a record $334 billion in cash at the end of last year after selling $134 billion in stocks in 2024, including notable stakes in both Apple and Bank of America, according to CNBC. As of March 31, that amount has increased to $347 billion. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Buffett amassing a big pile of cash may seem like a smart move in light of the market's recent performance. After all, throughout history, only former Presidents Richard Nixon and Gerald Ford saw the stock market perform worse during their first 100 days in office than Donald Trump in 2025. However, while Buffett has so far managed to limit his exposure to recent market volatility, it's typically not in the best interest of the average investor. Here's why. Although Buffett kept billions safe from potential loss this year, the Oracle of Omaha made clear that he doesn't believe cash is king. "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned,' he wrote in his 2024 letter to shareholders. The problem with cash is that your potential return on investment is very limited. Even if you put money into a high-yield savings account or certificate of deposit, it's unlikely you'll earn more than 5% annual interest, and it'll probably be much less. Given that the S&P 500 has consistently produced average annual returns above 10% in its history — despite the volatile nature of the stock market — choosing cash investments cuts your growth potential. Let's not forget inflation can siphon the buying power of cash and lower the value of any returns. So, while putting money into cash can make investors feel safer during turbulent times, you might also end up losing ground if inflation is high. Read more: BlackRock CEO Larry Fink has an important message for the next wave of American retirees — here's how he says you can best weather the US retirement crisis So, where should your money go instead? CNBC reported data from J.P. Morgan Asset Management that shows a traditional portfolio with 60% in stocks and 40% in bonds consistently outperforms cash in the long run. This is based on putting 60% of your money into an S&P 500 index fund and 40% into the Bloomberg US Aggregate Bond Index. From 1995 to 2024, the performance of this 60/40 portfolio would beat cash on a one-month basis 65% of the time. On a six-month basis, it beats cash 75% of the time, and when looking at performance over a year, that number climbs to 80%. Finally, over a time horizon lasting 12 or more years, the 60/40 split portfolio outperformed cash 100% of the time. A similar 60/40 portfolio also beat out a diversified portfolio of 11 different asset classes during the stock runup in 2024, according to Morningstar research cited by CNBC. The 60/40 portfolio gained 15%, while the diversified portfolio gained only 10%. However, as President Donald Trump's trade policies have shaken up the markets, diversified portfolios have so far done better this year, in large part because the price of gold is up more than 30%. In times of uncertainty, many people feel comforted by holding cash. It may be wise, in such cases, to build up an emergency fund and keep it in a high-yield savings account. But if you already have enough cash socked away for a rainy day, consider putting that money in a portfolio and riding the waves. Berkshire Hathaway can afford to have billions sitting on the sidelines earning low returns, waiting for an opportune time to make use of their cash. But you don't have to follow suit, and miss out on potential gains. Even if the market continues to be volatile, a portfolio with a long-term outlook can help weather the storm and put you in a good position for recovery. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
24-04-2025
- Business
- CNBC
Warren Buffett has a record amount of cash on the sidelines. Here's how experts recommend balancing saving and investing
Warren Buffett is sitting on a record amount of cash. That's not necessarily something everyday investors should emulate. If you have money on the sidelines, it may be time to rethink your strategy, experts say. Buffett's conglomerate Berkshire Hathaway, with a diverse portfolio of businesses, was sitting on a record $334 billion in cash at the end of last year. Yet in a February letter to shareholders, Buffett told shareholders that "despite what some commentators currently view as an extraordinary cash position," the majority of the money invested in Berkshire is in equities. "Berkshire will prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned," Buffett wrote. More from Personal Finance:Avoid 'dangerous' investment instincts amid tariff sell-offWhat to know before trying to 'buy the dip'20 items and goods most exposed to tariff price shocks In hindsight, Buffett's cash position looks wise, as Trump administration tariff policies have caused market turbulence. Investors have also been thought to have a cash cushion. There is $6.88 trillion in money market funds as of the week ending April 16, according to the Investment Company Institute — even though higher interest rates have made it possible to earn more on cash. Yet even as the markets have flirted with bear territory, experts still say it's possible to have too much money on the sidelines. A traditional portfolio comprised of 60% stocks and 40% bonds almost always outperforms cash in the long run, according to recent JPMorgan Asset Management. That is based on a classic 60/40 portfolio comprised of the S&P 500 index and Bloomberg US Aggregate Bond Index versus cash based on Treasury bills or a certificate of deposit equivalent, according to Jack Manley, global market strategist at JPMorgan Asset Management. In looking at data over 1995 to 2024, the 60/40 portfolio beat cash on a one-month basis roughly 65% of the time, Manley said. On a six-month basis, that increases to 75% of the time. For one year, that climbs to 80% of the time. And by the time you hit 12 years, it's 100% of the time, he said. Yet in times of uncertainty, investors often feel safer in cash. "When we think about investors making the wrong decisions — investing with their guts, not with their brains, where they are going to if they're panicking — they're going to cash," Manley said. In the stock runup of 2024, a "plain-vanilla version" of a 60/40 portfolio gained about 15%, according to new Morningstar research. The portfolio includes a 60% weighting in the Morningstar US Market Index and 40% in the Morningstar US Core Bond Index. Yet a diversified portfolio of 11 different asset classes only gained about 10%, the research found. That included larger cap domestic stocks, developed markets stocks; emerging markets stocks; Treasuries; U.S. core bonds; global bonds; high yield bonds; small cap stocks, commodities; gold and REITs. Major shifts in U.S. tariff policy may change how well those strategies perform going forward. Thus far in 2025, a diversified portfolio has held up better, with gold gaining about 32% this year, according to Amy Arnott, portfolio strategist at Morningstar. Meanwhile, commodities, global bonds and real estate have held up better than U.S. stocks, she said. With interest rates higher, cash has been a better portfolio diversifier than Treasuries in recent years, according to Morningstar's research. Notably, those cash allocations are best held outside the portfolio in an emergency fund or for any large expenses that may come up in the next two years, Arnott said. Current retirees may want to have at least one to two years' worth of portfolio withdrawals in cash, she said. With current turmoil and market uncertainty, it's important to remember that making radical shifts to your portfolio can often backfire, Arnott said. "If you've had an asset allocation that was a good fit for your time horizon and your investment goals previously, it's probably not a good idea to be making dramatic changes to that just because of all the uncertainty that's going on right now," Arnott said. Investors who have an ample cash position to fit their needs do tend to feel more confident now, said Adrianna Adams, a certified financial planner and head of financial planning at Domain Money. However, for those who already have a sufficient emergency fund, the best use for extra cash is typically in the markets, Adams said. "I wouldn't recommend holding cash if we're using that account or allocation towards our long-term goals," Adams said. "If we're going to need the money in the next two years, then absolutely, we should keep it in cash." High-yield savings accounts tend to be a favorite among consumers for emergency funds, Adams said. However, individuals in high-income tax brackets may want to consider municipal money market funds that help limit the tax bills they will pay on the interest they earn on that money, she said.
Yahoo
17-04-2025
- Business
- Yahoo
DoubleLine Opportunistic Core Bond ETF Marks First Three Years
DBND Generated Higher Return with Less Risk than Benchmark and Fund Category Average TAMPA, Fla., April 17, 2025 /PRNewswire/ -- The DoubleLine Opportunistic Core Bond ETF (ticker symbol DBND), an actively managed exchange-traded fund launched March 31, 2022, on the NYSE Arca electronic exchange, now has a three-year track record. For the three years ended March 31, 2025, the DoubleLine Opportunistic Core Bond ETF (DBND or the Fund) delivered an annualized return of 1.66% (based on net asset value). DBND's benchmark, the Bloomberg US Aggregate Bond Index (the Aggregate), produced an annualized return of 0.52% for the same period. The average annualized return for DBND's Morningstar fund category, Intermediate Core-Plus Bond, 0.92%. DBND delivered that excess return with less risk than the benchmark and the fund category average as measured by return volatility and maximum drawdown. Performance (%) 1 Mo 1Q2025 Year-to-Date 1 Yr 3 Yr Since Inception(3-31-22 to 3-31-25) Gross Expense Ratio DBND (Market) -0.03 2.76 2.76 5.87 1.70 1.70 0.45 DBND (NAV) -0.03 2.69 2.69 5.89 1.66 1.66Morningstar Category (NAV) -0.13 2.61 2.61 5.27 0.92 0.92Bloomberg US Aggregate Bond Index 0.04 2.78 2.78 4.88 0.52 0.52Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance current to the most recent month-end may be obtained by calling (855) 937-0772 or by visiting Performance greater than one year is DoubleLine, Morningstar; Category: Intermediate Core-Plus Bond. Active Management DoubleLine Deputy Chief Investment Officer Jeffrey Sherman, portfolio manager of DBND with DoubleLine CEO and Chief Investment Officer Jeffrey Gundlach, said active management through DoubleLine's Fixed Income Asset Allocation (FIAA) process has been key in negotiating the unfolding fixed income markets. This includes top-down sector allocation and management of duration (aka interest-rate sensitivity) as well as bottom-up security selection and credit analysis. For example, the portfolio, Mr. Sherman noted, was allocated 48.5% to government and government guaranteed securities – specifically, U.S. Treasuries and Agency mortgage-backed securities (Agency MBS) – 51.5% to credit, including corporate bonds, bank debt, non-Agency MBS, commercial mortgage-backed securities (CMBS), as of March 31, 2025. By comparison, at its launch on March 31, 2022, DBND was allocated 36.5% to government and government-guaranteed securities and 63.5% to credit. "Over the past two years, we upgraded the credit quality of the credit allocation of the portfolio. In February this year, we sold credit to add government-backed paper." Risk-Adjusted PerformanceAnnualized Return Standard Deviation Return per Unit of Risk Maximum Drawdown DBND (Market) 1.70 % 6.97 % 0.24 -8.80 % DBND (NAV) 1.66 % 7.08 % 0.23 -8.92 % Morningstar Category (NAV) 0.92 % 7.51 % 0.12 -10.77 % Bloomberg US Aggregate Bond Index 0.52 % 7.67 % 0.07 -10.40 %Source: DoubleLine, Morningstar; Category: Intermediate Core-Plus BondApril 2022 through March results of the investment team's active management over the three years ended March 31, 2025, can be measured in commonly used risk metrics. While delivering an annualized return superior to the Aggregate and the average of the Morningstar Intermediate Core-Plus Bond fund catetory, DBND did so with less return volatility as measured by standard deviation (DBND 7.08%; fund category 7.51%; benchmark 7.67%) and a lower maximum drawdown (DBND -8.92%; -10.77% fund category; benchmark -10.40%). Maximum drawdown is an asset or fund's largest peak-to-trough decline over a given period. "Along with relative values among different debt sectors, the drivers of risk and return change over time in these markets," Mr. Sherman said. "So an active approach is important for success not only over the long term but also the medium term. That should be clear today in 2025 with the horizon obscured by market noise, policy uncertainty and by changes, possibly even reversals, in decades-long investment trends and economic regimes." Objective The objective of DBND is to maximize current income and total return by, under normal circumstances, investing at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in fixed income instruments or other investments with economic characteristics similar to fixed income instruments. DBND can invest across the credit spectrum, including up to 50% in below-investment-grade bonds, and across the capital structure throughout the sectors of the global fixed-income universe. Under normal market conditions, the portfolio managers intend to construct an investment portfolio with an average effective duration of no less than two years and no more than eight years. DoubleLine Exchange-Traded Funds Including DBND, DoubleLine ETF Adviser LP is adviser to eight ETFs. The other seven are fixed income funds DoubleLine Asset-Backed Securities ETF (DABS), DoubleLine Commercial Real Estate ETF (DCRE), DoubleLine Mortgage ETF (DMBS) and DoubleLine Multi-Sector Income ETF (DMX); equity funds DoubleLine Fortune 500 Equal Weight ETF (DFVE) and DoubleLine Shiller CAPE® U.S. Equities ETF (CAPE); and DoubleLine Commodity Strategy ETF (DCMT). For information on all DoubleLine ETFs, please visit the following web page: About DoubleLine DoubleLine ETF Adviser LP is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine's offices can be reached by telephone at (813) 791-7333 or by email at ETFinfo@ Media can reach DoubleLine by email at media@ DoubleLine® is a registered trademark of DoubleLine Capital LP. The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contain this and other important information about the investment company, and may be obtained by calling (855) 937-0772, or visiting Read them carefully before investing. Definitions Bloomberg US Aggregate Bond Index - This index (the "Agg") represents securities that are SEC registered, taxable and U.S. dollar denominated. It covers the U.S. investment grade, fixed-rate bond market, with components for government and corporate securities, mortgage pass-through securities and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis. Risk Disclosure Investing involves risk and principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Investing in ETFs involves additional risks such as the market price of the shares may trade at a discount to its net asset value ("NAV"), an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a fund's ability to sell its shares. DoubleLine ETFs are distributed by Foreside Fund Distributors, LLC. DoubleLine® is a registered trademark of DoubleLine Capital LP. ©2025 DoubleLine Capital LP View original content to download multimedia: SOURCE DoubleLine Sign in to access your portfolio
