Berkshire Hathaway (BRK.A, BRK.B) is a conglomerate holding company best known for its iconic chief executive officer (CEO), 澳洲幸运5开奖号码历史查询:Warren Buffett, also known as the Oracle of Omaha. Buffett has been building the company for decades and is one of the wealthiest people in the world, with an estimated net worth of $141.6 billion as of September 2024.

Berkshire Hathaway started as a textile manufacturing firm, and Buffett began acquiring shares early in his career. By 1965, he took control of the company outright. Buffett soon began exiting the textile mill business and adding businesses from other 澳洲幸运5开奖号码历史查询:industries, including insurance, retail, and media, to Berkshire's overall portfolio. Berkshire has a 澳洲幸运5开奖号码历史查询:market capitalization of $971.13 billion as of September 2024.

Buffett built a reputation along the way as one of history's greatest investors, which makes Berkshire Hathaway stock coveted by other investors. But should Berkshire Hathaway stock have a home in 澳洲幸运5开奖号码历史查询:your individualꩲ retirement account (IRA)? We'll take a closer look.

The Berkshire Hathaway Portfolio

Berkshire Hathaway is a 澳洲幸运5开奖号码历史查询:conglomerate of different companies. It also invests in publicly traded companies. Changes made by Buffett in the Berkshire portfolio often move the stock prices of the companies traded and get significant media coverage. Its top public equity holdings as of June 30, 2024 include:

• Apple (AAPL), with an $89.11 billion stake, owning 2.6% of the tech company
• American Express (AXP), with a $38.68 billion stake, owning 21.03% of the financial services company
• Bank of America (BAC), with a $33.28 billion stake, owning 11.1% of the bank
• Coca-Cola (KO), with a $28.49 billion stake, owning 9.3% of the beverage company

Warren Buffett's Management Style

Buffett is a long-term, 澳洲幸运5开奖号码历史查询:buy-and-hold investor focused on value. He has long been known to focus his investments on companies he knows. As such, he usually avoids higher-risk, momentum names. His preference is for well-established, slower-growth businesses. Buffett typically makes investments with plans to hold them for at least 10 years.

One of Buffett's more popular quotes is, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Berkshire's 2015 purchase of Precision Castparts for $235 per share in cash diverged slightly from Buffett's traditional investment style. Although Precision falls into the category of businesses that Buffett tends to favor, Berkshire paid a 21% premium per share to buy it, departing from Buffett's preference for good value in his trades.

Berkshire Hathaway's Performance

Buffett's investment style and choices make for a conservative portfolio overall, with less than average volatility. The principle of 澳洲幸运5开奖号码历史查询:risk and return suggests that stocks with lower risk♔ levels als🌌o provide lower return potential.

Buffett has delivered above-average returns over the long term. From 1965 to 2020, the average annualized return for Berkshire shares was 20%, while the 澳洲幸运5开奖号码历史查询:S&P 500 returned an annualized 10.2%.

Income investors likely find the lack of a 澳洲幸运5开奖号码历史查询:dividend yield one of the only drawbacks of investing in Berkshire Hathaway stock. Berkshire has only paid a dividend once in 1967.

For those considering Berkshire Hathaway as an 澳洲幸运5开奖号码历史查询:individual retirement account (IRA) holding, this is less of a concern, as withdrawals from IRA accounts are generally not recommended until the individual reaches age 59½.

2 Share Classes

One of the most unusual features of Berkshire Hathaway stock is its stock price. 澳洲幸运5开奖号码历史查询:It never splits. On Sept. 12, 2024, Berkshire Hathaway's 澳洲幸运5开奖号码历史查询:Class A shares (BRK.A) closed at $675,380 per share. This 💧puts even a single share purchase out of reach of many investors. Buffett is clear that he prefers to a✨ttract long-term investors rather than traders.

In 1996, Buffett partially conceded, issuing a 澳洲幸运5开奖号码历史查询:Class B block of shares to make his company more accessible. These shares made a 50-for-1 澳洲幸运5开奖号码历史查询:stock split in January 2010 and closed at $450.87 per share on Sept. 12, 2024.

There is essentially no difference in these shares outside of the stock price. Trading flexibility is t﷽he primary advantage of owning Berkshire Hathaway Class B shares.

Does Berkshire Hathaway Fit in an IRA Account?

For most investors, Class B shares are the only option when adding Berkshire Hathaway to an IRA. The maximum annual contribution to an IRA is $7,000 for 2024. People who are 50 and older can make an additional 澳洲幸运5开奖号码历史查询:catch-up contribution of $1,000.

This means that Class A shares are not an option for IRAs. The Clas🌜s B shares are within the reach of many investors.

Mutual funds and 澳洲幸运5开奖号码历史查询:exchange-traded funds (ETFs) that contain broadly diversified portfolios of well-established, large-cap names are often recommended🍬 as core retirement portfolio holdings. Buying shares of Berkshire Hathaway is akin to buying shares ꦕof a large-cap value mutual fund. Class B shares could thus make an ideal holding in retirement portfolios.

Frequently Asked Questions

The Bottom Line

The portfolio's composition of well-established, mature businesses that can operate successfully in most market environments makes Berkshire Hathaway an investment appropriate for most IRA accounts. Buffett's long-term investing style aligns well with the long-term nature of IRA accounts.

Younger 澳洲幸运5开奖号码历史查询:investors can use the stock as a core long-term holding for growing portfolios. Retirees will likely maintain a lower equity allocation in their portfolios, with capital preservation being a primary consideration. However, equities are still needed in these portfolios to help stay ahead of inflati♕on, and Berkshire Hathaway can be an ideal⛎ choice to fill out that part of the portfolio.