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Warren Buffett is well known for his investing talent. Aside from his nose for reliable companies, the now-billionaire got rich partly by buying undervalued stocks and holding them for the long term.
It may come as a surprise then to learn that Berkshire Hathaway — the multinational conglomerate Buffett runs — held a record $334 billion in cash at the end of 2024 after selling $134 billion in stocks that year. As of March 31, that cash in hand had climbed to $347 billion.
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Buffett amassing a big pile of cash could be a smart move in light of the market’s recent performance. After all, President Donald Trump’s first 100 days in office saw the worst stock market performance since Richard Nixon’s own second term kickoff in 1973.
But Buffett doesn’t keep cash on hand because he’s afraid of short-term volatility. This liquidity is for a much more calculating reason, but one that many investors might struggle to replicate.
Why over-investing in cash can be a bad idea
Although Buffett kept billions in cash this year, the Oracle of Omaha has made it clear that he doesn’t believe cash is king.
The reason he keeps cash on hand is so he’s ready to invest when the right opportunity arises. But everyday investors don’t have the same suite of investing options as Buffett. Even if you put your cash into a high-yield savings account, or certificate of deposit, it’s unlikely to earn more than 5% annual interest.
Meanwhile, inflation — which can completely erode the value of your cash – hit 2.4% in May.
That’s where alternative assets like gold can come in — especially given its 24% surge since the start of the year. The precious yellow metal could even climb past $4,000 per ounce by the second quarter of 2026, according to a report by JPMorgan.
A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.
Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.
With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.
If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.
In that sense, real estate could help you combat inflation too. As inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. Tapping into the property market can sometimes help you ride out waves of inflation.
But investing in real estate hasn’t always been accessible: The $34.9 trillion U.S. home equity market has historically been the exclusive playground of large institutions.
Homeshares aims to flip that narrative. The platform allows accredited investors to get direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
This approach can provide an effective, hands-off way to invest in high-quality residential properties with the added benefit of diversification across regional markets with a minimum investment of $25,000.
With risk-adjusted target returns ranging from 14% to 17%, the U.S. Home Equity Fund could unlock new real estate opportunities for you, offering accredited investors a low-maintenance alternative to traditional property ownership.
Read more: You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s how
Another way to diversify your portfolio
Alternative assets like fine art are another option for investors looking to diversify their portfolios.
Over 85% of high net worth individuals have maintained their confidence in art as an investment. According to a 2024 report from Art Basel and UBS, these investors felt art was a relatively safe investment compared to traditional assets like stocks.
But for most investors, this pricey investment class has simply been out of reach. Now, with Masterworks you can invest in blue-chip pieces of art that tend to only increase in value over time.
Masterworks handles every step of art investing, from authentication and acquisition to storage and sale — no art expertise or billionaire’s checkbook needed.
The platform has already distributed back $60+ million in total proceeds, including the principal, to investors across 23 exits. To see if you qualify as an investor check out more on Masterworks here.
See important Regulation A disclosures at Masterworks.com/cd.
How to decide where to put your money in the stock market
If you decide you want to invest in the stock market over alternative assets, you don’t need to be Warren Buffett to do it wisely. Simple, diversified strategies can still outperform cash.
CNBC reported that data from JPMorgan Asset Management shows a traditional portfolio with 60% in stocks and 40% in bonds outperformed cash 100% of the time when invested for a period of 12 or more years.
You can invest in both stocks and bonds with the Wealthfront Investing platform. With their automated indexing tools, you can easily access globally-diversified investing options that are catered to your preferred risk levels. With automatic portfolio rebalancing, you can rest assured that your investments are going towards your preferred allocation of stocks and bonds.
The best part? You can get an extra $50 after funding a taxable automated investing account with $500 or more.
With that said, the 60/40 portfolio mix isn’t as resistant to successive bear markets as one that dips into alternative assets like gold, real estate or art. As always, a well-balanced portfolio can act as both a driver and protector of your wealth.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
