I believe stocks are “the runaway winner” over bonds and gold, and “will be by far the safest” investment in the long run, said Warren Buffett in Fortune. He considers bonds such dangerous assets that they “should come with a warning label.” They’re tied to interest rates that are so low right now that they can’t even cover losses from inflation and taxes.
His take on gold is enlightening, also. According to Buffett, investors should avoid gold, which will “never produce anything.” It’s far better to invest in companies or farmland, both of which actually create new wealth. All the world’s gold, melded together, would form a 68-square-foot cube, worth about $9.6 trillion. Would you rather have that cube, or its dollar equivalent: all the cropland in the U.S., plus 16 Exxons (the most profitable company in the world), with $1 trillion or so left over? We think the choice is obvious. So doesn’t Buffett.