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Warren Buffett on inflation and the way Berkshire Hathaway CEO is fighting it | Personal Finance | Finance


Each the UK and US alike have seen soaring rates of inflation in recent months, and while price rises slowed within the US in April, the annual inflation rate remained near a 40-year high. In April, the US saw the speed slow to eight.3 percent, down from 8.5 percent in March.

Ramping up stock purchases, this yr, Berkshire Hathaway has spent $41.5billion (around £33.8billion), Fidelity International reports.

Already a shareholder within the oil and gas multi-national Chevron, in the primary quarter of 2022, Berkshire Hathaway grew its stake from $4.5billion to $26billion

The corporate has also boosted its already substantial holding in Apple this yr – buying $600million (around £481million) of additional shares.

It is also purchased shares within the Hewlett-Packard Company (HPQ) – taking an 11.4 percent stake in the corporate in April.

Buffett has also addressed Bitcoin.

He said: “Whether it goes up or down in the following yr, or five or 10 years, I don’t know.

“However the one thing I’m pretty sure of is that it doesn’t produce anything… It’s got a magic to it and folks have attached magic to a lot of things.”

He also compared Bitcoin to assets offering a tangible product for individuals who own it.

Buffett said: “For those who said … for a one percent interest in all of the farmland in the US, pay our group $25billion, I’ll write you a check this afternoon.”

“For $25billion I now own one percent of the farmland. For those who offer me one percent of all of the apartment houses within the country and you wish one other $25billion, I’ll write you a check, it’s quite simple.

“Now in the event you told me you own all the Bitcoin on this planet and also you offered it to me for $25 I wouldn’t take it because what would I do with it? I’d must sell it back to you a technique or one other.

“It isn’t going to do anything. The apartments are going to provide rent and the farms are going to provide food.”

In March, research by Fidelity International found two-fifths of UK investors (39 percent) are anxious about inflation.

Maike Currie, Investment Director for Personal Investing at Fidelity International, comments: “Because the economist Milton Friedman put it, ‘inflation is taxation without laws.’ With prices rising at a rate not seen for many years, investors are understandably anxious concerning the impact it can have upon their portfolio.

“Rising prices are detrimental to investment returns, as they eat into the actual value of your money.

“Inflation at 4 percent halves the purchasing power of your savings and income in lower than 20 years. So, an eight percent rate of inflation could have devastating consequences, not least for those nearing retirement and interested by drawing an income from their pension savings.

“But there are steps you may take to mitigate the impact of inflation upon your portfolio – diversification stays the cornerstone of any successful investment portfolio. Because the storm clouds gather across the outlook for each inflation and rates of interest, look to investments than can inject some much-needed diversification into your portfolio.”

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