Title: Warren Buffet's Investment Strategy: Focus on These 5 Stocks as We Approach 2025
Investment strategies often involve diversification, yet one of the most successful investors in the world isn't a fan. Warren Buffett once declared, "Diversification is protection against ignorance. It makes little sense if you know what you're doing." With Berkshire Hathaway delivering an impressive average annual return of approximately 19.8% over almost six decades, it's clear Buffett knows his stuff.
Regardless, Berkshire Hathaway's portfolio isn't as diversified as most would expect. As we begin 2025, nearly 66% of the conglomerate's investments are allocated to these five stocks: Apple, American Express, Bank of America, The Coca-Cola Company, and Chevron.
1. Apple
Apple remains the largest holding in Berkshire Hathaway's portfolio, maintaining its top spot into the new year. Berkshire owns around 300 million shares of the tech giant, worth approximately $73.2 billion. This equates to around 24.8% of Berkshire's total holdings.
Buffett began reducing his stake in Apple in the final quarter of 2023, but the decision came at a cost. Apple stock soared while Berkshire offloaded its shares in the consumer tech giant.
2. American Express
American Express is Buffett's second-largest holding, accounting for around 15.3% of Berkshire's portfolio. Berkshire owns over 151.6 million shares of the financial services company, worth roughly $45.2 billion.
Buffett highlighted American Express as a stock he expected to own "indefinitely" in his 2023 and 2024 shareholder letters, noting that its share of American Express' earnings in 2023 was significantly greater than its initial investment of $1.3 billion.
3. Bank of America
Bank of America is Buffett's third-largest position, representing 11.5% of Berkshire's total portfolio. The conglomerate owns around 766.3 million shares of BofA, worth roughly $33.9 billion.
Buffett sold a significant portion of Berkshire's shares in Bank of America in July 2024. Despite this, Bank of America has consistently ranked as one of Berkshire's top five holdings.
4. The Coca-Cola Company
Coca-Cola ranks fourth in Berkshire's portfolio, with the conglomerate owning 400 million shares worth approximately $24.7 billion. This stake accounts for around 8.4% of Berkshire's portfolio, making Coca-Cola its fourth-largest holding.
Buffett has praised Coca-Cola for its strong brand and ability to adapt to changing market trends. The company evolves its product offerings in response to shifting consumer preferences, demonstrating its adaptability and innovation.
5. Chevron
Chevron is Berkshire's fifth-largest holding, accounting for 5.9% of the conglomerate's total portfolio. Berkshire owns over 118.6 million shares of the oil and gas company, worth around $17.4 million.
Buffett first invested in Chevron in late 2020, buying and selling shares of the energy giant ever since. The legendary investor most recently sold shares of Chevron in the second quarter of 2024.
Believing in a company's exceptional businesses and holding onto these investments often reaps substantial rewards. As Buffett wrote to Berkshire shareholders in 2023, "When you find a truly wonderful business, stick with it." Among the top Buffett stocks, none can be easily deemed the "best pick."
While it's challenging to predict a stock's future performance, the economic moat, adaptability, and long-term success of these companies indicate potential for positive outcomes. With dividends included, all of these top Buffett stocks are likely to deliver solid returns in the long-term.
Despite Buffett's belief in the importance of diversification, his investment strategy with Berkshire Hathaway has led to significant wealth generation through his top five investments. In 2025, these holdings account for a majority of the conglomerate's portfolio, with money allocated mainly to Apple, American Express, Bank of America, The Coca-Cola Company, and Chevron.
Investors looking to emulate Buffett's approach could consider these stocks, as their strong financial positions and potential for growth make them appealing prospects for finance-savvy individuals seeking long-term gains.
