Jeremy Gates looks at the nation’s money issues and reports on whether this is the moment to buy US shares

WHEN the veteran investor Warren Buffett defied the market and invested £3.1bn in America’s biggest bank, Bank of America, despite its shares dropping like a stone, was he giving a clue to Britain’s small investors?

For most of 2011, they have seen savings in equities – in shares or managed funds held as ISAs, or in personal pension pots – shrinking by the week.

The latest plunge in August alone slashed the value of many savings plans by 10-20%. For some, it may delay their retirement.

Shares in Bank of America, which once topped 50 dollars, have halved this year to less than eight dollars.

But Buffett’s move triggered a 25% bounce in the share price and in 24 hours, the ‘Sage of Omaha’ was looking at a paper profit of £220m.

Of course, through his company Berkshire Hathaway, Buffett has a track record of taking big stakes in companies under fire: this strategy gave him a £3bn stake in Goldman Sachs in 2008, while he paid less than £200m for a 10% share of Wells Fargo in 1989/1990.

He has had disasters too. When he lost nine-tenths of nearly £170m pumped into two Irish banks in 2008, which carried on collapsing regardless, he later called that move “an unforced error”.

A few days before Buffett made his latest move, financial adviser and discount broker Hargreaves Lansdown announced a new research service for clients on US companies, as part of an improved service for dealing in overseas shares.

Richard Hunter, head of UK equities at Hargreaves Lansdown, says: “Clients can access research on 43 of the biggest and most well-known US companies through our website, and selected editions of our newsletter.

“This is a unique offering among major UK stockbrokers.

“Our new overseas dealing service means clients can buy and sell thousands of US, Canadian and European shares by telephone and online, just like UK shares, for the same low commission.”