Source: USA TODAY

Standard & Poor’s downgraded the debt of Berkshire Hathaway, run by investing superstar Warren Buffett, to AA from AA+ Thursday, with a negative outlook.

Downgrading anything Buffett touches borders on heresy on Wall Street: The company’s annual meeting in Omaha has been called the Woodstock of capitalism.

But S&P dings Berkshire for its reliance on GEICO, an insurance company, for most of its dividend income.

And, the ratings company says, Berkshire’s stock holdings make the company risky, as does its practice of keeping less capital to protect against losses than its competitors do.

Management succession at Berkshire is also an offsetting factor. Although Buffett said in his 2012 letter that there was a successor and a plan for a seamless transition, Buffett’s successor as CEO hasn’t been revealed.

S&P’s downgrade of United States debt has also dragged Berkshire Hathaway’s rating down. U.S. Treasury debt has an AA+ rating, and Geico, like many insurers, holds U.S. Treasury debt. Currently, no U.S. insurer has an AAA rating from S&P.

And, S&P says, Berkshire remains one of the nation’s strongest companies, despite the downgrade.

Berkshire lost its coveted AAA rating in 2009. S&P’s move brings its rating inline with the two other major debt raters, Moody’s and Fitch.

Berkshire Hathaway Class A shares were down about 0.6% in early trading.

Copyright © 2013 USA TODAY, a division of Gannett Co. Inc.

Source: USA TODAY

Low interest rates aren’t enough to push many investors back into the stock market, according to a survey by Bankrate.com.

Despite record highs in stocks and rock-bottom interest rates, 76% of investors say they are not inclined to put more money in the stock market. The percentage is unchanged from last year, Bankrate says.

“The memories of 2008 for so many individuals are so very fresh,” says Bankrate.com’s senior financial analyst Greg McBride. “And they weren’t burned once, but twice, going back to the (2000) technology bust.”

The poll results are unlikely to make Federal Reserve Board chairman Ben Bernanke happy. Part of the Fed’s low-interest-rate strategy is to push money into stocks and bonds, which would increase investment portfolios and make people feel wealthier — and thus more inclined to spend.

Investors’ aversion to stocks was echoed by the weekly sentiment survey of the American Association of Individual Investors, which showed 27% bullish and 48% bearish. The remainder were neutral. Over the long term, the survey has averaged 39% bullish and 31% bearish.

And the AAII’s negative readings were an improvement from the previous week, with bullish sentiment increasing by 7.5 percentage points.

Individuals are concentrating on paying down debt, says McBride. In fact, the percentage of household income dedicated to paying down debt is at a 29-year low, he says. Some of that reduction came through refinancing, and some from bankruptcy. “Still, it’s lower any way you slice it,” McBride says.

Many households continue to struggle to save, thanks to stagnant wages. “It’s tough to save when your income hasn’t changed and your monthly expenses keep creeping higher,” McBride says.

In the long run, however, investors’ conservatism and their inability to save will hurt them, particularly since individuals are increasingly responsible for their own retirement. “Such a conservative stance will leave them well short of where they need to be for their longer-term goals,” McBride says.

Copyright © 2013 USA TODAY, a division of Gannett Co. Inc.