Here’s a fascinating short video showing the things that keep billionaire investors awake at night, and how they seek to preserve their wealth in any market environment.
Whether Your Investment Portfolio Is Large Or Small, It’s Well Worth A Look At How The World’s Wealthiest Investors Protect Their Fortunes
Billionaires Hold Little Personal Cash As Part Of Their Wealth
Interestingly, the majority of billionaires are surprisingly cash poor.
The average billionaire only holds around 1 per cent of their wealth in liquid assets like cash.
It’s because most of their money is usually tied up in business interests, stocks, bonds, funds, and other financial assets.
Mind you, 1 per cent of a billion is, for most of us, more than a small fortune!
Wealth is not stagnant. The portfolios of billionaires tend to vary in line with the health of the economy and the markets.
When times are good, their wealth flourishes. But any market crash could have a damaging effect on their overall fortune.
Just like the rest of us, billionaires are very concerned about market fluctuations. As a result, they actively seek ways to protect their wealth, even in the wake of a catastrophic geopolitical, economic, or monetary event.
Among other things, billionaires hedge against big events. They diversify their investment portfolios to include safe havens, such as cash and gold. And they maximise their opportunities for success in any investment environment.
How The World’s Billionaire Investors Protect Their Wealth
How Four Billionaires Protect Their Wealth
Warren Buffett has built up massive amounts of cash in Berkshire Hathaway. As a ‘value investor’, if the market falls, he can use the cash to purchase assets at rock bottom prices.
David Einhorn, the billionaire founder of Greenlight Capital, believes the financial strategies employed by central bankers that can depress markets can be neutralised with gold.
Paul Tudor Jones, the reclusive hedge fund manager who called the 1987 crash, believes bonds are the most expensive they’ve ever been by virtually any metric – and has joked that he’d rather hold a burning chunk of coal than a U.S. Treasury bond.
Ray Dalio, the founder of the world’s largest hedge fund, is adamant that 5 to 10 per cent of a portfolio should currently be held in gold. Not surprisingly, in November 2017, his company Bridgewater increased its gold holdings by 525 per cent.
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