Warren Buffett’s Record Cash Pile: Should You Mimic His Strategy?

Warren Buffett, the highly acclaimed investor, is known for his record cash holdings within his Berkshire Hathaway conglomerate. At the end of the previous year, Berkshire Hathaway held a record-breaking $334 billion in cash. Despite this, Buffett has continuously emphasized the importance of investing in equities over holding cash.

Even during market turbulence caused by the Trump administration’s tariff policies, experts argue against having excess money on the sidelines. The Investment Company Institute reports a staggering $6.88 trillion in money market funds as of mid-April. However, even in a bearish market, there’s a potential downside to having too much uninvested money.

According to JPMorgan Asset Management, a traditional portfolio consisting of 60% stocks and 40% bonds usually outperforms cash in the long run. This 60/40 portfolio, comprising the S&P 500 index and Bloomberg US Aggregate Bond Index, consistently trumped cash holdings, with an increasing margin over longer holding periods.

In 2024, a simple 60/40 portfolio gained approximately 15%, according to Morningstar research. However, a diversified portfolio encompassing 11 different asset classes only gained about 10%. The ongoing changes in U.S. tariff policies may alter these strategies’ performance. Till now in 2025, diversified portfolios, especially those with gold assets, have performed relatively well amidst global bonds, commodities, and real estate.

With the rise in interest rates, cash has become a better portfolio diversifier compared to Treasuries. However, experts recommend maintaining cash allocations outside portfolios for emergencies or large imminent expenses. Current retirees are advised to hold cash equivalent to one to two years’ worth of portfolio withdrawals. Notably, dramatic shifts in your portfolio due to current market uncertainties can often backfire — it’s advisable to stick to an asset allocation suitable for your investment horizon and goals.

Investors who have adequate cash to cover their needs typically feel more confident, says certified financial planner Adrianna Adams. However, for those with a substantial emergency fund already in place, the best place for extra cash is usually in the market. High-yield savings accounts are often recommended for emergency funds, but high-income individuals may want to consider municipal money market funds to limit tax bills on interest earnings.