Are you an entrepreneur? Warren Buffet wrote an article in the Fortune Magazine where he reiterates his investment policy.
Surprisingly he attacks investment in bonds and gold. “Right now bonds should come with a warning label” says Buffet as interest rates are at historical lows in the US thus effecting tax returns which are a key to investment criterion.
The only Bond Investments that Buffet invests in through his company Berkshire Hathaway Company are his requirements under the liquidity regulations.
Due to the weakening of the US dollar a Wall St. Journalist names Shelby Cullom Davis commented, “Bonds promoted as offering risk-free returns are now prices to deliver return free risk”. Although the price of gold has almost trebled in the past 5 years, as investors use gold as a safe haven, countries as well as various financial systems are defaulting. Buffet is still sceptical about gold because he sees only 2 uses for gold i.e. manufacturing of jewellery and that an ounce of gold will remain just that for the next 100 years. Therefore, as gold production increases gold demand will begin to fall.
Under the above circumstances Buffets preferred investments are Farms, Real Estate as well as Business. Ideally entrepreneurs need to know that in the long term business assets “should have the ability in inflationary times to deliver output that will retain its purchasing – power value, while requiring a minimum of new capital investment.”
A tip from Buffet is that entrepreneurs need to put in the long hard hours of work in order to get the return and growth that will make businesses work as opposed to investments in bonds and gold.