This year, investors in stocks and bonds face a climate of uncertainty, shaped by shifting trade policies, tariff changes, anticipated Federal Reserve actions, and concerns about economic growth. Such conditions can pose risks to financial health, but they also hold the potential for future gains if navigated wisely.

When uncertain times arise, many investors turn to acclaimed figures for guidance. Warren Buffett, the CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), stands out as a source of investing wisdom. Recently, Buffett’s significant adjustments to his portfolio reveal strategies that can benefit all investors.

Buffett adjusted his portfolio late last year, and it now looks brilliant. Image source: The Motley Fool.

Emulating Warren Buffett’s Approach

Buffett famously advised investors to be “fearful when others are greedy and to be greedy only when others are fearful.” This perspective proved valuable in 1986, during a strong bull market, when he chose to hold back from aggressive investments.

“Our main capital allocation moves in 1986 were to pay off debt and stockpile funds. Neither is a fate worse than death, but they do not inspire us to do handsprings either.”

Buffett’s strategy advocates patience. With the S&P 500 index rising over 20% in 2023 and 2024, it’s worth revisiting Buffett’s actions during this time of market growth.

Berkshire Hathaway’s Cash Reserves

As of the end of Q1, Berkshire held a record $348 billion in cash, mostly built up during the previous year. Buffett’s preference is for stocks over cash, stating, “Berkshire will never prefer ownership of cash-equivalent assets over good businesses.” Yet, in uncertain times, a higher cash reserve can provide security.

Berkshire’s accumulation of cash involved a gradual reduction of its stake in Apple Stock. The following table illustrates these changes:

Berkshire Hathaway Apple Stock Investment
Quarterly Period	Q424	Q324	Q224	Q124	Q423	Q323
Shares (millions)	300.0	300.0	400.0	789.4	905.6	915.6
% Equity Portfolio	28	26	30	41	50	50

Data source: SEC filings.

This reduction exemplifies Buffett’s careful management of risk while remaining committed to a strong investment. Although his stake in Apple decreased significantly, it continues to represent 28% of Berkshire’s equity portfolio.

Key Takeaways for Investors

Retail investors can learn vital lessons from Buffett’s approach. Firstly, decisions should not be rushed. Buffett took over a year to adjust his Apple holdings, emphasizing thoughtful evaluation. A useful strategy is to buy or sell shares in thirds to mitigate timing risks.

Another key lesson is diversification. Over-allocating to a single stock—even one as dominant as Apple—might increase risk exposure. Buffett’s adjustments reduced his stake while still maintaining a significant position.

Buffett has shown patience with cash reserves. His philosophy underscores that being under-invested isn’t necessarily detrimental. In fact, Berkshire’s stock has outperformed major indices in early 2025 during ongoing market fluctuations.

Buffett’s Insight on Market Movements

At a recent shareholder meeting, Buffett addressed investor emotions amidst apparent market volatility. Despite recent fluctuations due to a 20% market drop followed by a rebound, he reassured investors that this didn’t signify a major disruption.

“What has happened in the last 30, 45 days…is really nothing,” he explained, recalling how Berkshire’s stock has experienced significant declines several times over his tenure without dire consequences.

Buffett emphasized the importance of emotional discipline: “People have emotions, but you got to check them at the door when you invest.”

Looking ahead, Buffett will officially step down as the CEO, with Greg Abel succeeding him in 2026. Nonetheless, investors can remain confident in Berkshire’s values emphasizing strong investment principles.

Abel cited Berkshire’s cash reserves as a strategic asset that will enable the company—and its investors—to navigate tough economic times effectively. The lesson for investors is clear: don’t wait for fear to strike during down markets; maintain a balanced portfolio that includes investable cash throughout all market conditions.