Buffet Proven Right Again

“It won’t be the economy that will do in investors; it will be investors themselves.” –Warren Buffett


The folksy wisdom of Buffett was on full display in 2020.

I recently analyzed Dimensional Fund Advisors year end review of the capital markets. The chart below was the key takeaway for me.

Cash Concerns in 2020

The decline in stocks in the first quarter of 2020 sent many anxious investors headed for the hills. Over $1 Trillion was taken out of the global markets for the relative “safety” of money market accounts.

Over the next 9 months the S&P 500 went up over 47%. Beaten down US small cap value stocks gained 67%. The return on money market accounts over this 9 months? You guessed it…zero! Ouch!

This move to cash proved to be costly to anxious investors and proved Warren Buffett right once again.