May 21, 2025
President Donald Trump’s trade war and the rise of protectionist policies have stoked fears that global commerce is now a zero-sum contest, and legendary investor Warren Buffett is concerned about where we’re headed.
"Trade can be an act of war," the 94-year-old CEO of Berkshire Hathaway told shareholders at his company’s recent annual meeting. “In the U.S. we should be looking to trade with the rest of the world … We want a prosperous world.”
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He went on to say that it’s a “big mistake” when you have 300 million people “crowing in some way about how well they’ve done.”
“Eight countries have nuclear weapons, including a few that I would call quite unstable. I do not think it's a great idea to try and design a world where a few countries say ‘Hahaha, we’ve won’ and other countries are envious … trade should not be a weapon.”
The eight countries besides the U.S. that possess nuclear weapons are Russia, France, China, the U.K, Pakistan, India, Israel, and North Korea.
The Oracle of Omaha insists that balanced trade is a positive for the world and richer trading partners could actually be beneficial to the U.S.
"The more prosperous the rest of the world becomes it won't be at our expense,” he said. “The safer we'll feel and your children will feel someday."
Buffett’s thesis may have already been validated in a small way as the S&P 500 jumped 3.26% a day after the U.S.-China agreement to temporarily slash tariffs was announced.
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While the trade war seems to be simmering down, it isn’t officially over yet and investors should take serious steps to protect their portfolios from further volatility ahead.
Here are three ways to protect your wealth in an increasingly fractured world.
Safe havens
Spooked by the volatility and random tariff policy, many investors have retreated to traditional safe havens such as gold to protect themselves. As a consequence, gold could be considered one of the few winners of the ongoing trade war.
Each ounce of the precious yellow metal now trades at $3,310.26, which is 36% higher than the same time last year. By comparison, the S&P 500 is up just 11% over the same period.
If you’re worried about the future of the global economy, adding some exposure to gold could be a good idea.
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Diversification
Buffett’s preferred method of protection is diversification. Berkshire Hathaway’s portfolio is incredibly well-diversified, which has previously helped the company sail through periods of intense turmoil.
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As of 2025, the company owns a vast portfolio of private businesses, 36 publicly traded stocks, and roughly $348 billion in cash. Buffett has added exposure to Japanese trading houses by buying stakes in Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.
Consider a broad mix of asset classes, sectors, industries and even countries to mitigate the risk of a volatile S&P 500 within your portfolio. Vanguard recommends having 20% of your portfolio invested in international stocks and bonds. You can do this with mutual funds or ETFs.
Be careful of over diversification. "Holding excessive investments may lead to overlapping exposures, where similar assets reduce overall diversification benefits. Additionally, managing an overly diversified portfolio increases costs and complexity without proportionally lowering risks or improving returns," says Saxo Bank.
Fixed income
Surging yields in recent years may have added some excitement to relatively boring assets such as treasuries and bonds.
A 10-year U.S. Treasury bond currently offers an attractive yield of 4.5% and the 30-year rate is above 5%. According to The Wall Street Journal, some reasons for this surge are fading recession fears, persistent inflation anxiety and growing fiscal concerns.
For risk-averse retirees who rely on their assets to support their lifestyle, earning a fixed 3% or 4% yield isn’t ideal but it’s better than losing money in the stock market. A popular rule of thumb says to subtract your age from 110 to determine how much of your portfolio should be in equities.
If you are worried about volatility and want to protect your wealth rather than expand it, adding fixed income to your portfolio could be something to consider.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
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