One of Warren Buffett’s Final Shareholder Letters Had a Warning Most People Missed
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Investing Share Share Close Mail Page URL https://money.com/warren-buffett-shareholder-letter-warning/ Link copied! One of Warren Buffett's Final Shareholder Letters Had a Warning Most People Missed By: Marc Guberti Marc Guberti Marc Guberti is a personal finance writer who hosts Breakthrough Success, a podcast where he teaches listeners how to grow their businesses and achieve personal transformations. Has also written: Warren Buffett’s Obvious Rule Every Retiree Should Live By — and What to Do About It The Investing Mistake That ‘Boring’ Investors Avoid Ray Dalio’s Rules for Managing Market Stress Warren Buffett’s Boring Stock Picks — and Why They Keep Winning The Three-Fund Portfolio Strategy and Why You Need It See full bio Published: Apr 20, 2026 4 min read Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.
Getty Images Warren Buffett has been teaching valuable lessons to investors for many decades, from why you should stay the course when markets get choppy to how to find the best companies to invest in. While Buffett is no longer CEO of Berkshire Hathaway, investors can still look to his shareholder letters for guidance on investing. In one of his last shareholder letters published last year, Buffett warned of “fiscal folly.” Here’s what he meant. Must ReadExperts are Bullish on Gold — Here's How to Get InWarren Buffett on Market Volatility — and 3 Ways You Can Take Advantage What is 'fiscal folly'? Buffett specifically warned of “fiscal folly,” which he said can destroy the value of paper money. Fiscal folly refers to moves by governments that make currencies weaker. “Paper money can see its value evaporate if fiscal folly prevails,” Buffett wrote. “In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge.” He also stated that fixed-coupon bonds do not protect investors from runaway currency problems. Buffett was explaining why, despite holding a large cash position, Berkshire Hathaway investors still have a majority of their money invested in stocks. “Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities — mostly American equities although many of these will have international operations of significance,” he wrote. “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.” Where People Are Investing Right NowMotley Fool's monthly stock recommendations — get expert advice and portfolio strategies'The Higher the Balance, the More You'll Earn': Open a savings account with CIT Bank and get 3.75% APYCheck out SoFi's no commission investing platform Why Buffett’s warning matters for everyday investors Buffett's warning isn’t just for Berkshire Hathaway investors. It can also resonate with everyday investors who are setting money aside in savings accounts and other cash-like alternatives, like certificates of deposit (CDs). While it’s important to have some money in cash — at least enough to cover expenses for three to six months in the case of emergencies, according to many financial advisors — it’s important to not keep too much money on the sidelines. That’s because the value of cash can be eaten away over time, most notably by inflation. Berkshire Hathaway has a large cash position for short-term needs, but Buffett has said that he prioritizes owning strong businesses. Investors can use this mentality by making sure they have enough cash available for short-term expenses and then investing in promising businesses via the stock market. That way, your money can outgrow inflation in the long run. Solid businesses tend to hold up better than cash because when expenses go up, companies can raise prices while retaining demand. While cash is guaranteed to lose purchasing power over time, businesses can gain market share and produce results for shareholders causing their stock prices to go up. Although Buffett expressed a valid warning, it wasn’t a signal to put all your cash into stocks. Investors should determine their allocation to cash, stocks, bonds and alternative assets like real estate based on their risk tolerance, goals and time horizon, including how long they have until they plan to retire. Must ReadExperts are Bullish on Gold — Here's How to Get InWarren Buffett on Market Volatility — and 3 Ways You Can Take Advantage