Warren Buffett’s advice if World War 3 breaks out: Why Berkshire Hathaway's former CEO would keep buying stocks instead of holding cash
Warren Buffett advice: A global war could send investors rushing to sell stocks and hold cash. However, American investor and former CEO of Berkshire Hathaway, Warren Buffett has offered a different view of what he would do if World War III broke out. The billionaire investor said he would keep buying stocks even if a major conflict unfolded.
During an interview with CNBC in 2014, Buffett had explained why he would not abandon the stock market during a world war. His comments also raised questions about whether cash would be the safest place to keep money during such a crisis.
Why Warren Buffett Would Keep Buying Stocks During a War
Buffett has built his investment philosophy around owning businesses for the long term. A war would not automatically change that approach, he indicated in the interview.
He had said previously, “I will still be buying the stock,” as quoted by Moneywise. And this would remain his mindset, even if World War III began. That does not mean he expects markets to remain stable during a conflict. Share prices could fall sharply as investors react to events, and losses are possible.
Buffett said, “You’re going to be a lot better off owning productive assets,” as quoted in the report.
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Why Buffett Warned About Holding Cash
Cash may feel safer when markets are under pressure, but Buffett has questioned whether it would retain its value during a major war.
He noted that money had lost value during virtually every war he knew about. If the purchasing power of cash declines, people may find that their money buys less than it did before, even if the balance in their accounts has not changed.Buffett told in 2014 that, “The one thing you could be quite sure of is if we went into some very major war, the value of money would go down,” adding, “That’s happened in virtually every war that I am aware of,” as quoted by Moneywise
That is one reason Buffett said he would continue investing rather than move entirely into cash. His comments reflect his own assessment of how money and assets may behave during a conflict. They do not mean cash will always lose value or that stocks will always perform better.
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World War 3 (iStock)
Farms and Apartment Buildings Are Also Options
The investor also pointed out that farms and apartment buildings are assets he would consider owning if a world war broke out.
Farms produce food, while apartment buildings provide housing, so both have uses that extend beyond their value as investments.
However owning property or farmland would not remove every risk. Their values and income could also be affected by the circumstances of a war. Buffett was describing the assets he would prefer to own and not promising that they would be immune to losses.
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How Stocks Performed During World War II
The stock market’s performance during World War II is helpful to understand the historical context.
As per a Standard & Poor’s report, which was cited by Moneywise found that, the S&P 500 had fallen about 17%. That was in the five months after Japan attacked Pearl Harbor on December 7, 1941. And by the end of World War II in 1945, the index had risen 62% from its level on the day of attack.
The figures show how a market that initially falls during a crisis can later recover but they don’t tell investors how stocks would respond to another world war. Also past performance cannot guarantee a similar result.
What Warren Buffett Would Do if World War III Broke Out Now
Buffett’s comments offer a glimpse into how he thinks about wealth during a major crisis. He said he would keep buying stocks and also consider farms and apartment buildings, rather than assume cash would be the safest option.
His view rests on the value of owning productive assets over time. But a world war would bring enormous uncertainty, and no investment can promise protection from every outcome.
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