Is it too early too start thinking about how to invest in 2024? I say it never is. So I’m doing what I often do, and reminding myself what I can learn from Warren Buffett.
Since he took over US investing firm Berkshire Hathaway in 1965, his shareholders have enjoyed average annual returns of 20%.
If he can do that, he’s got to be worth listening to, right?
A lot of writers would just trot out their favourite Buffett quotes at this point. But I want to… oh, er, do that. Well, just one.
I think it’s especially suited to the weak UK stock market we see at the end of 2023, and going into 2024.
Buy, buy, buy
Warren Buffett‘s annual letter to Berkshire Hathaway shareholders should, in my view, be essential reading for every private investor.
So, here’s my pick for the time we’re in right now:
Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.
Warren Buffett, letter to shareholders 2016
I’d say we’ve had a few storms like that in the past decade.
The 2020 stock market crash was one. Many saw it as a catatrophe for shareholders. I reckon it was one of the best times we’ve ever had. At least, for those investing for the long term and wanting to buy shares cheap.
Dark clouds in 2024
“Higher for longer“. Heard that anywhere lately?
We’ve been seeing it all over the headlines for months now. It’s talking about interest rates, of course. And those are driven by inflation.
Bank of England Governor Andrew Bailey just ruled out any chance of an interest rate cut for the forseeable future. He says getting inflation down to the target of 2% will be “hard work“.
It all means we’re paying more money for a lot of things. We have less free cash to invest in shares, and falling demand causes share prices to fall.
I don’t have a lot to spare these days, for sure. But what I do have will be going into cheap UK shares in 2024. As much as I can afford.
Stock market crash?
I see a lot of headlines shouting about a stock market crash too.
But there’s always someone out there banging on about the next collapse, about a new bubble bursting, or whatever.
The drama-mongers have nothing to lose. If they’re right, they could go down as the one who predicted the great crash of 2024.
And if not, well, they’ll soon be forgotten and can have another go next year.
We can’t rule out a crash. But here in the UK, I just see shares as too cheap. Folks are worried about slow economic growth. But that’s still growth. It’s not losing money.
And broker forecasts suggest that record FTSE 100 profits and dividends are just round the corner.
Where’s my washtub?
So, I don’t know about anybody else.
But in 2024, I intend to do exactly what Warren Buffett suggests. And that’s buy as many cheap UK shares as I can afford.
Can I have a new washtub for Christmas?
