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Forget Brexit! I say invest the Warren Buffett way

So we have a Prime Minister with a new Brexit deal, who now has to get it past a vote in the House of Commons. Where have we heard that before?

I’m writing this Friday, but depending on when you’re reading this, the Saturday vote might have been held, we might be on track to leave the EU with a deal, or we might be back in the chaos that has plagued our political progress for the past three years.


Over that time, a lot of people have been moving their cash to more defensive havens. An ounce of gold, for example, has risen over the past year, from $1,230 to $1,488. And in the world of shares, super reliable Unilever is a good example of investors’ pursuit of safety — its share price has doubled in five years.

What do we do? Abandon all those companies we think are good, and hunker down surrounded by gold coins until it’s all over? In times like this I remember Warren Buffett once famously said: “I buy on the assumption that they could close the market the next day and not reopen it for five years.”

Some years ago, I spoke to an investor who followed the markets with a short-term view. His strategy relied on watching daily price movements and charts, looking for crossover points between various chart lines, and all sorts of other stuff that I really didn’t even try to understand.

We were both in a far-off country, and he told me he’d closed all his investment positions the day before he left home and would buy in again when he returned. I simply switched off from my long-term investments, and neither knew nor cared how they were doing while I was away.

Desert Island

So, I say extend Buffett’s idea beyond the markets themselves and invest as if you were going to fly away the very next day and spend five years on a desert island away from all worldly news. Suppose you could invest your cash today (as I write, Friday) before the big Brexit vote, then simply not learn the results for another half-decade, and have no idea how the UK economy goes and what happens to share prices in the meantime. Where would your money go?

Mine wouldn’t go into gold, that’s for sure. That’s because I see it as just a gamble and not an investment — it doesn’t generate any new wealth the way companies do. No, it would go into top global companies listed on the London Stock Exchange.

Top stocks

The big oil companies, BP and Shell, I reckon will be fine in five years time, no matter what happens in the political world, and that I’d come back to five years of accumulated 6%+ dividends.

GlaxoSmithKline and AstraZeneca too. They’ve had a few tough years of rebuilding their drugs pipelines, but their share prices have performed reasonably and they’ve kept paying dividends. They’ll be profitable for at least another five years, I’m sure.

There’s a long list of worldwide companies that should do just fine regardless of what politicians get up to. And here’s a thought — why not base you portfolios on them all the time, not just in times of political upheaval?

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended AstraZeneca. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.