is berkshire stock a safe " retirement " haven ?

Question

hi :
i'm a berkshire hathaway shareholder of b stock . i direct my 401k and will be retiring within a couple of years. i contribute 29% of my weekly pay to my 401k . i will contribute and max out until the day of retirement . i don't have any faith in fund managers in trusting them to direct my life savings . after retiring i'm looking to roll over my 401k to the dicount brokerage where my shares of b stock set and buying more . even though berkshire has it's days of fluctuation the stock has never plummeted causing huge losses to shareholders . my question :
would this be a safe haven for my money ? thanks in advance

Answer 1

There is an old saying of Never put all your eggs in one basket. Even if that basket is Berkshire Hathaway. You need to diversify, especially as you are looking to retire. Consider some good bond funds for part of yoru money.

Answer 2

Berkshire is about as safe of an equity investment as you will find, and by its very nature offers you significant diversification. People that tell you otherwise don't know Berkshire very well. Warren Buffett is extremely conservative, but at the same time very savvy. Berkshire is very much like a mutual fund, because Berkshire is so diversified through ownership in so many industries.

For ultra conservative, but above-industry performance, also check out Dodge & Cox International. Until a few years ago, this stodgy old company didn't even have a 1-800 number. You had to call them on your dime. D&C's record is incredible.

One other thing I might recommend is maybe 10 percent of your portfolio in gold. Once a month, I buy a 1 ounce gold panda (99.98 percent gold), and have been for years. Gold is a great counter-balancer for bear markets, and it never hurts to have some.

Answer 3

I would be inclined to say absolutely not.

You're taking on a lot of risk by not diversifying. You're 401k lives and dies by one stock. Many stocks have never "plummeted" as you mentioned, but that doesn't mean they alone are a safe retirement investment. GE has never plummetted. It's also considered the best managed company in the world. That still doesn't make it a safe retirement investment.

I'm surprised you said that you don't trust fund managers to direct your retirement. These people are educated professionals, not car salesmen. Their livelihood depends on their ability to manage people's money like your's.

Anyway, invest in some index funds. Since you're nearing retirement, you'll need some fixed-income funds. Go ahead and invest in large-cap and mid-cap funds as well to help growth throughout your retiremen.t

Look at what happened to many Enron employees. A lot of them invested all of their retirment in Enron and they lost every single penny. Diversify and you don't have to worry about things like that.

Answer 4

No. You don't have to trust fund managers nowadays. Etfs & index funds are not actively managed and cover all areas. EFA-global EWA-Australia PGJ-China + some S&P500 index +PWT-small cap. Safe is the most overused word in the world. Banks are not safe as will lose vs taxes & inflation. Where is your income flow going to come from? None from Berkshire. Need FAX and other income plays as well. Guess what - the Wizard of Omaha is going to die & then who are you trusting not that even he deserves as much as you are giving him. Market has gone from 700 to 12,500 since 1980 so index fund investments have done well and given the "wizard" much undeserved praise. In Saloman Bros & US Air we saw how he can fail badly.

Answer 5

vegas you need a serious refresher course in investing. EFA is NOT global. Its europe, Far East and Australia. Global is EVERYWHERE like VEU which by the way also combines your other two foreign investment picks.

As for Mr. Buffet there is no word on who his successor will be (if anyone) not a smart chocie especially if its the only thing you have,

As for the other answers they pretty much got it you have to diversify.

Answer 6

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Answer 7

Think about what you're saying. You're putting your entire future in one equity. Bershire Hathaway is a great investment. The 29% you're putting in is also great. But;

Please learn about "Asset Allocation". You could be really hurting yourself if you don't.

Consider yourself warned.

Answer 8

Yes.

However, I suggest Teléfonos de México, América Móvil and Microsoft too.