President Donald Trump's broad-based tariffs sent shock waves through the stock market. The Dow Jones Industrial Average fell nearly 1,680 points on April 3, marking the worst day for the stock market since 2020. Following Trump's announcement, investors seemed blindsided by the magnitude of the tariffs and the way they were calculated, leaving them confused about their potential impact on the broader economy.
The utter chaos might leave investors wondering if it's simply best to stick with cash during this tumultuous time. While that may not be the worst idea, there is one safe stock that I think investors can buy amid the uncertainty -- and nothing else compares.
A flight to safety
Trump's tariffs are so broad and so heavy that nearly every sector is likely to feel some impact, largely because the tariffs could hit U.S. gross domestic product (GDP). Carl Weinberg, chief economist at High Frequency Economics, said in a research note that U.S. GDP could contract by 10% in the current quarter. Weinberg projects that the tariffs could take a $741 billion bite out of U.S. household real incomes or corporate earnings. Economists at JPMorgan Chase say the tariffs amount to the largest tax increase on the consumer since 1968.
So, where can you put money when it looks like the consumer may struggle and no sector will be immune? Simple, give your money to Warren Buffett by investing in his company Berkshire Hathaway (BRK.A +0.60%)(BRK.B +0.79%). Berkshire is one of the largest conglomerates in the world and it's run by arguably the best investor in the world, Buffett, who has also trained a very capable team of investing lieutenants. Berkshire has become a safe haven for the market this year.
Data by YCharts.
Berkshire has not only crushed the broader market but has even hung in with gold (as represented by the SPDR Gold Shares ETF (GLD +1.51%)), which is viewed as a safer investment vehicle in times of uncertainty and has also been on an unprecedented run. There are many reasons to invest in Berkshire Hathaway. For one, the company is incredibly safe and has built an epic cash position of more than $330 billion between cash, cash equivalents, and short-term U.S. Treasury bills.
Berkshire also runs several different businesses in many different sectors. In 2024, about 48% of its revenue came from insurance premiums or insurance investment income, in which Berkshire takes the float from premiums and invests it into cash, stocks, and other financial instruments. Berkshire is famously known for its $274 billion equities portfolio that holds major stocks like Apple, Bank of America, Coca-Cola, and many more. Berkshire also has other significant revenue streams from the Burlington Santa Fe Railroad, its energy assets, and other controlled businesses in the manufacturing, servicing, and retail sectors.
As I mentioned, Berkshire also comes with an experienced management team that knows how to navigate the economic cycle. Last year, many investors questioned why Berkshire chose to be a net seller of stocks and hoard cash during a bull market. Well, now those moves don't look so bad -- in fact they appear incredibly smart and forward-looking.
NYSE: BRK.B
Key Data Points
Set it and forget it
If you follow the stock market, then you likely know that Buffett and Berkshire have been big winners for decades. Between 1965 and 2024, Berkshire's stock generated compound annual gains of 19.9%, compared to the broader market's 10.4% including dividends.
No, Berkshire is not going to be a multi-bagger over a short period like some high-flying artificial intelligence stocks during a bull market. But it's a company built to last and succeed over a long period. One reason Berkshire has been so successful is because it has managed to avoid many of the storms caused by some of the biggest market meltdowns in history.
Berkshire also has a war chest of cash should it see compelling opportunities. It made several winning investments following the Great Recession of 2008. Even in these difficult market conditions, investors can buy Berkshire stock, set it, and forget it.
