Warren Buffett Sold More Than $13 Billion in Stocks. Here's How Investors Should Take the News.

People pay attention when famed investor Warren Buffett speaks. They pay even more attention when his business, Berkshire Hathaway (BRK.A 0.99%), acts, whether buying or selling stocks. That's why, when it was disclosed that Berkshire Hathaway sold about $13.3 billion worth of shares in the first quarter of this year, some people took it as an sign of dire things to come for the U.S. economy. 

Much talk surrounding the U.S. economy has been on whether and when a recession is coming. For people who may have already been on the fence, Berkshire Hathaway's share sales served as another confirmation it might arrive soon.

There's no concrete answer about what's to come for the economy, but regarding Berkshire Hathaway's move, here's how investors should take it.

Why would Berkshire Hathaway sell shares?

Few (if any) investors are known more for their buy-and-hold investing strategy than Buffett. When referring to Berkshire Hathaway's approach, he once said, "Our favorite holding period is forever." So why sell shares now, you ask? I believe it comes down to a couple of things.

Interest rates are as high as they've been since the beginning of the Great Recession of 2007-2009. This makes fixed-rate investments such as bonds more attractive. There are short-term U.S. Treasury bonds offering yields of higher than 5%.

With high yields, some investors may prefer to take the guaranteed interest instead of sticking around for a potential drop in the stock market. It seems the company also knows it, increasing its short-term investments in U.S. Treasury bills by more than $11 billion this past quarter.

The second reason is "cash is king," which is a popular saying in investing when the economy is in or headed toward a recession. Aside from being able to cover expenses, cash allows investors to take advantage of opportunities the market may present in a downturn.

Recessions and lower stock prices usually go hand in hand, as people sell investments to get more cash. However, if you're fortunate enough to have cash on hand, this is a chance to grab some great companies at a value. Buffett made his name as a value investor, so it wouldn't be surprising if the company is preparing to go bargain hunting if the market sees considerable declines in the near future. 

Avoid a doomsday mindset

For investors not approaching retirement anytime soon, Berkshire Hathaway's move or a looming recession shouldn't throw you off your tracks. Recessions have been an inevitable part of the economic cycle since the beginning. Since World War II, the U.S. has experienced 12 recessions (about one every six to seven years).

Data source: National Bureau of Economic Research.

As a long-term investor, it's important to keep your eyes on your end goal and realize that recessions will be bumps along the way. Recessions have real impacts and shouldn't be overlooked, but if you're fortunate enough to have the financial means to continue investing through a recession, that's generally what you should do.

It may seem counterproductive to invest while stock prices are dropping, but consistency is more important than trying to time when stock prices will rise or fall. It is nearly impossible to predict when the market will hit its bottom or peak, even for Buffett.

The economy and stock market have historically recovered (and grown) after every recession. This doesn't guarantee it'll continue to happen, but history tends to repeat itself. There's no reason to believe it won't, in my opinion.

Only one piece to the decision-making puzzle

You shouldn't hold onto a stock for the sake of holding onto it. Sometimes, it's best to cut your losses or take some profits when a stock is wildly overvalued. However, if you're selling stocks, it should be based on thoughtful consideration of the stocks themselves, not because Buffett or Berkshire Hathaway made certain moves.

Buffett and Berkshire Hathaway have very different financial situations from most investors, so their goals, risk tolerance, and plans may not align with yours. Their decisions -- while noteworthy and usually informative -- shouldn't be what dictates your investing decisions.

It's fine to consider their moves, but they shouldn't be your only deciding factor. You still want to consider your own goals, risk tolerance, and personal situation.