How to Safely Invest in Uncertainty and Fear

Nov 01, 2023
toy tank and dollars, army token. High quality photo

In times of uncertainty and fear, one of the best ways to protect your portfolio – and earn potential yield is by investing like Warren Buffett. 

That’s because of his long-term investing approach.

For one, he advises investors to have a long-term outlook, because short-term volatility is typical. Two, “During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted,” as quoted by MarketWatch.

Taking that approach, the 93-year-old is now worth just over $114 billion.

And while we can always buy Buffett stocks, like Coca-Cola and Occidental Petroleum, we can actually buy most of Buffett’s stocks at less cost with greater exposure with an ETF. 

Look at the VanEck Vectors Morningstar Wide MOAT ETF (MOAT), for example.

With an expense ratio of 0.49%, the ETF Is based on the billionaire’s economic moats – which are like “economic castles protected by unbreachable moats,” as noted by Zacks. “In simple terms, a moat is a unique competitive advantage that enables a company to outperform others in the same industry over time.”

In fact, some of the MOAT ETF top holdings include Comcast Corp., CME Group, Cisco Systems, Constellation Brands, Rockwell Automation, and Polaris Inc. 

Or, you can invest in low-cost index funds, according to Warren Buffett.

As noted by the billionaire, “When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds,” as quoted by CNBC.

Some of the top ones to consider are the Vanguard Dividend Appreciation ETF (VIG), which has an expense ratio of 0.06%; the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which has an expense ratio of 0.35%; and the Vanguard High Dividend Yield ETF (VYM), which has an expense ratio of 0.96% at the moment.