Warren Buffett's Approach To Investing In Election Years

Warren Buffett, known as the “Oracle of Omaha,” is regarded as one of the best American investors of all time. Still running the Berkshire Hathaway BRK BRK at 93 years old, Buffett has navigated his portfolio through various bull markets, downturns and election cycles.

What Are Buffett's Politics?

Buffett has declared himself a Democrat, but not a “card-carrying Democrat.” In 2020, Buffett said he would have no problem voting for Mike Bloomberg, who was running for the Democratic presidential nomination at the time, according to Reuters.

At the time, Buffett also said he agreed with some of the policies of Bernie Sanders. Buffett supported Hillary Clinton in her run against Donald Trump in 2016, but did not get spooked and alter his investment strategies when Trump won the election.

How Does Buffett Manage His Portfolio During Election Years? 

Buffett is a big believer of adding to his winners and cutting losers. He doesn't shy away from that strategy during election years, regardless of who is leading in the polls or the favorite to win.

In 2016, ahead of the election between Clinton and Trump, Buffett significantly trimmed his position in Walmart Inc WMT and Deere & Co DE. At the time, he added to his positions in Apple Inc AAPL, which he has recently trimmed, as well as adding to his positions in airline companies like Southwest Airlines LUV, Delta Airlines DAL and others, according to ValueSider, a site that tracks funds' 13-Fs and other filings.

See Also: Warren Buffett’s Oil Bet Hits Slick Patch: Death Cross Looms Over Occidental Before Q2 Earnings

In 2020, Buffett appeared to be a little cautious with his buys, adding predominantly energy stocks as well as different ‘COVID plays' during the pandemic. In the lead up to the 2020 election, Buffett bought shares of Bank of America BAC, Pfizer Inc PFE, AbbVie Inc ABBV while trimming his position in financial stocks like JPMorgan JPM and Wells Fargo & Co WFC.

In Conclusion: Throughout various turbulent times, Buffett has preached to his followers to never bet against America. In 2018, Buffett told investors that while a lot of people worry about political division in the country, things tend to work out.

"Multiple times in my life, people have felt the country was more divided than ever," he said in 2018, at Berkshire Hathaway's annual shareholders meeting. "After every election you'll have people feeling the world is coming to an end and, you know, ‘How could this happen? Through it all, you know, America — in fits and starts — but America really, really moves ahead."

So, while some investors may switch up their strategies during election years, Buffett mostly stays true to the investing strategies that he's developed throughout the last 50+ years, and doesn't get caught up in the volatility during election years. 

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Image created using artificial intelligence via Midjourney.