Big Warren Buffett Tip for you: Oracle of Omaha warns these investors

Warren Buffett Tip: Fixed-income investors might be facing a bleak future. This is what ace investor Warren Buffett has said. In his letter to the shareholders of Berkshire Hathaway, Warren Buffet said, "Fixed-income investors worldwide -whether pension funds, insurance companies or retirees - face a bleak future."

Big Warren Buffett Tip for you: Oracle of Omaha warns these investors. Source: Reuters

Warren Buffett Tip: Fixed-income investors might be facing a bleak future. This is what ace investor Warren Buffett has said. In his letter to the shareholders of Berkshire Hathaway, Warren Buffet said, "Fixed-income investors worldwide -whether pension funds, insurance companies or retirees - face a bleak future."

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The Oracle of Omaha also said that bonds are not the place to be these days. In order to substantiate his argument, Buffet wrote in the letter, "Can you believe that the income recently available from a 10-year US Treasury bond - the yield was 0.93 per cent at yearend -- had fallen 94 per cent from the 15.8 per cent yield available in September 1981?" He took the examples of important countries like Germany and Japan where upon trillions dollars of sovereign debt, investors earn a negative return, according to an IANS report.
The Oracle of Omaha further noted that Several insurers and bond investors may shift their purchases to obligations backed by shaky borrowers at present, however, risky loans can not be the answer to low interest rates.

While talking to the Berkshire Hathaway, he noted that the largest in value is its property or casualty insurance operation, which for 53 years has been the core of Berkshire.

"Our family of insurers is unique in the insurance field. So, too, is its manager, Ajit Jain, who joined Berkshire in 1986. Overall, the insurance fleet operates with far more capital than is deployed by any of its competitors worldwide."

The Chairman of Berkshire Hathaway further said that the along with its financial strength, the huge cash flow that Berkshire annually receives from its non-insurance businesses, allows its insurance companies to safely follow an equity-heavy investment strategy which is not feasible for most of the insurers.

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