What’s going on here?

Just before markets started to tumble, Warren Buffett had a serious spring clean.

What does this mean?

Warren Buffett’s cash pile just got a whole lot bigger, as Berkshire Hathaway cut its Apple stake by almost 50% in the second quarter. Although, that’s not necessarily personal: Apple is still Berkshire’s biggest holding, and Buffett’s conglomerate has been offloading stocks for the last seven consecutive quarters. In fact, Berkshire shed $90 billion in stocks in the first half of this year, with $75 billion of that being cut loose in the last quarter alone. So it’s not just Apple in the crosshairs: the firm also trimmed nearly 9% of its stake in Bank of America, its second-biggest holding, since mid-July.

Why should I care?

Zooming out: Timing is everything.

Buffett timed his trades well: the all-star investor was selling shares while the S&P 500 hit a record high in mid-July. Now, there’s no telling exactly what Buffett’s thinking – but the sale could suggest that he’s pessimistic about the world’s stock markets or believes AI initiatives have challenged Apple’s supremacy. And if he expects a changed climate to reshuffle the winners and losers, it wouldn’t hurt to have more cash on hand.

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Source: Google Finance

The bigger picture: In… and out.

Buffett’s sale might’ve given you a flutter in your stomach, especially with stock markets wobbling this week. But remember, you can’t trust one investor to shape your view – and even the Oracle’s trades don’t necessarily reflect his personal outlook. One thing’s clear though: Buffett’s not afraid to hold cash. So if you’re unsure where to place your bets, you could do the same and lock in risk-free returns. And because banks usually slash rates on savings accounts before a rate cut, now could be the right time to lock in rates for longer-term cash deposits.