Image source: The Motley Fool
Is it too early to 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 taking over an American investment company Berkshire Hathaway In 1965, its shareholders enjoyed an average annual return of 20%.
If you can do that, it’s worth listening to, right?
Many writers would simply trot out their favorite Buffett quotes at this time. But I want to… oh, ahem, do that. Well, just one.
I think it is particularly suitable for the weak UK stock market that we will see at the end of 2023 and into 2024.
Buy, buy, buy
Warren Buffett’s annual letter to Berkshire Hathaway shareholders should, in my opinion, be essential reading for every private investor.
So here’s my pick for the moment we’re in now:
Every decade or so, dark clouds will fill the economic skies and briefly rain gold. When such downpours occur, it is imperative that we run out with washtubs, not teaspoons.
Warren Buffett, letter to shareholders 2016
I’d say we’ve had a few storms like that in the last decade.
The 2020 stock market crash was one of them. Many saw it as a catastrophe for shareholders. I think it was one of the best moments we’ve ever had. At least, for those who invest for the long term and want to buy cheap stocks.
Dark clouds in 2024
“Higher for longer“. Have you heard that anywhere lately?
We’ve been seeing it all over the headlines for months now. These are, of course, interest rates. And those are driven by inflation.
Bank of England Governor Andrew Bailey has just ruled out any possibility of an interest rate cut in the immediate future. He says that reducing inflation to the 2% target will “hard work“.
All of this means we are paying more money for many things. We have less free cash to invest in stocks and falling demand causes stock prices to fall.
I sure don’t have much to spare these days. But what I do have is investing in cheap UK shares in 2024. As much as I can afford.
stock market crash?
I also see a lot of headlines screaming about a stock market crash.
But there’s always someone out there screaming about the next crash, about the bursting of a new bubble, or whatever.
Drama mongers have nothing to lose. If they are right, they could be considered those who predicted the great crisis of 2024.
And if not, they will soon be forgotten and can try again next year.
We cannot rule out an accident. But here in the UK I find the shares too cheap. People are worried about slow economic growth. But that’s still growth. It’s not losing money.
And brokers’ forecasts suggest that this record FTSE 100 Profits and dividends are just around the corner.
Where is my laundry tub?
So, I don’t know about anyone else.
But in 2024 I intend to do exactly what Warren Buffett suggests. And that’s buying as many cheap UK shares as I can afford.
Can I have a new tub for Christmas?
