Warren Buffett’s top 3 bank stocks from Bank of America to Citigroup

According to Forbes magazine, Berkshire Hathaway CEO Warren Buffett’s real-time net worth is estimated to be approximately $133.2 billion as of March 14, 2024.

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He’s called the “Oracle of Omaha” after his hometown, and for good reason. What is one of Buffett’s most important investments? It’s a bank stock. Buffett owns about 53 stocks in Berkshire Hathaway’s portfolio, according to Financil. Five of his companies operate in the banking sector.

“If you follow sound banking practices, which means you don’t do what everyone else is doing, banks can be a perfectly reasonable investment,” Buffett said.

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Buffett’s top 3 bank stocks

Buffett remains a strong believer in bank stocks. According to InvestorPlace, Buffett’s top three bank stocks are:

1. Bank of America (BAC)
   Buffett currently owns more than 1 billion shares of BAC stock, worth about $35 billion. This is Buffett’s largest bank holding, and he has held onto it for a long time despite market fluctuations.

2. American Express (AXP)
   Buffett currently owns 151 million shares of AXP, worth about $32 billion. Buffett has long believed in America’s 16th largest bank, first investing in AXP stock in the 1970s. It’s also worth noting that this is Buffett’s third largest holding after Apple (AAPL).

3. Citigroup (C)
   Buffett currently owns 55 million C shares, worth about $3 billion. Although Company C is a small holding in his stock portfolio, it is one of the few stocks that Buffett has changed his mind and decided to reinvest in.

Things to consider before investing in bank stocks

There are a few things to consider before investing your money in bank stocks like Buffett’s.

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• Assess your risk tolerance: Stock investment always involves risk. Bank stocks tend to be more reliable long-term investments, but market conditions can certainly affect the value of your investment. Before entering the stock market, it is important to assess your level of risk.

• Deciding how much liquid cash to hold: Historically, investing money in the stock market provides significantly greater returns over the long term than earning interest in a high-yield savings account. However, it’s a good idea to have at least three to six months’ worth of liquid cash (if not more) before allocating additional funds to stock purchases.

• Decide whether you are looking for short-term or long-term gains: Investing in stocks and selling them quickly if the price rises quickly can lead to big profits. However, this strategy involves greater risk and typically results in a larger tax liability. If you are looking for stable long-term returns, investing in bank stocks is a safer choice.

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• Try to diversify your investments: Investing only a portion of your money in bank stocks instead of all of it is a smart way to protect yourself from market fluctuations. Consider building a diversified investment portfolio consisting of high-risk stocks, low-risk stocks, and conservative investments such as mutual funds, bonds, and ETFs.

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