Finimize - 😮 Four factors could bring stocks down

TOGETHER WITH

Hi Reader, here's what you need to know for February 28th in 3:12 minutes.

☕️ Finimized over an espresso tonic at VENUE in Prague, Czech Republic (2°C/35°F 🌤)

Today's big stories

Warren Buffett’s Berkshire Hathaway reported lackluster results in some of its key businesses
Four factors could be about to bring stocks down a notch – Read Now
China approved a ton of coal power plants last year, but there's hope for the country's green side yet

Not So Buff

What’s Going On Here?

Warren Buffett’s Berkshire Hathaway reported shrug-worthy results over the weekend.

What Does This Mean?

Buffett’s unrivaled reputation wasn’t born out of thin air: the value of his company’s stock has, on average, increased by twice as much as the US stock market every year for over 50 years. But Berkshire’s latest report hardly screamed success: the conglomerate’s all-important insurance and railroad businesses helped bring home record full-year operating earnings, sure, but hefty costs and slimming demand meant it ended the year in a slump. Berkshire’s $300-billion stock portfolio dropped off too. Now, Buffett often calls those slides meaningless given the firm’s long-term view, but the blip still dragged the firm to a nearly $23 billion loss last year.

Why Should I Care?

For markets: Money to burn.
Buffett’s annual letter – a surprisingly short one this time round – pushed one big point of contention: stock buybacks. See, there’s a new tax on buybacks in the US, with some arguing the cash would be better spent on workers’ pay or investing in the firm’s future. Buffett, though, defended their merits, saying they’re a smart way to use extra cash, especially when bought for fair prices. (Remember, buybacks reduce the number of shares available and give existing shareholders a bigger stake in the business and any profit.) Berkshire’s been a big fan of that tactic lately: with fewer promising acquisitions to spend money on, the firm bought back almost $8 billion of its shares last year.

The bigger picture: Gotta have faith.
Buffett sold more than $16 billion of stocks last quarter, dumping firms like TSMC, US Bancorp, and Bank of New York Mellon. That pulled its cash pile up to nearly $130 billion by the end of last year – but Buffett’s not completely pessimistic about markets. The Oracle of Omaha reminded investors to have faith in the US, saying there’s no reason to make a long-term bet against the world’s biggest economy.

You might also like: Buffett’s Berkshire Hathaway has a monstrous Japanese bet.

Copy to share story: https://go.finimize.com/wp/news/not-so-buff/

🙋 Ask a question

Analyst Take

Five Things That Could Send Stocks Lower

By Luke Suddards, Analyst

The S&P 500 had a supercharged start to the year.

Retail investors helped power it along, snapping up about $1.5 billion in US stocks a day – the biggest volume on record.

The problem – for the market anyway – is that it might not last.

See, a string of US economic data suggests there could be even more interest rate hikes ahead, and investors could well be growing more cautious.

That’s today’s Insight: retail investors and four other factors that could send stocks lower.

Read or listen to the Insight here

Efficient investing – hold the fees

In this increasingly digital age, you’ll be up to your neck in accounts, passwords, and platforms.

So when it comes to your investments, you might want to keep it simple and swap multiple brokers and services for one simple platform.

You can keep all your accounts in one place with Interactive Investor (ii), so you can see all your investments at a quick glance and adjust as soon as you spot a change.

Better still, ii’s flat-fee subscription plans mean you could save big on fees. Plus, there are no charges when you join, cancel, or transfer cash and investments.

Discover a more efficient way to invest with ii’s flat-fee plans.

Find Out More

Trading and other transactional costs apply. Investment value can go up or down and you could get back less than you invest. The value of international investments may be affected by currency fluctuations which might reduce their value in sterling. If you are unsure about the suitability of a particular investment or whether transferring your assets is the right course of action you should speak to suitably qualified financial adviser.