Investor Warren Buffett said even though the stock market is soaring, prices appear reasonable, and stocks would be a better investment than bonds for most people.

Buffett was interviewed Monday on CNBC and the Fox Business Network cable channels after a weekend full of events in Omaha for shareholders of Berkshire Hathaway, where he is chairman and chief executive.

"Bonds are a terrible investment right now," Buffett said.

The investor said bond prices are artificially inflated because the Federal Reserve continues to buy $85 billion of bonds a month, and owners of long-term bonds may see big losses when interest rates eventually rise.

He said the average investor should keep enough cash to be comfortable and invest the rest in equities. "Stocks are reasonably priced now. They were very cheap a few years ago," Buffett said on CNBC.

Buffett said most investors pay too much attention when the stock market reaches record highs. He said average investors should pay more attention to stocks when falling prices are falling because that's a sign they are getting cheaper.

The Federal Reserve's efforts to keep interest rates low have helped the stock market soar, Buffett said, but the improving economy also has played a role.

advertisement | advertise on newsday

Buffett said he remains a fan of Fed chairman Ben Bernanke. He also reiterated his support of JPMorgan Chase chairman and CEO Jamie Dimon.

Buffett said the current low interest rates continue to make long-term borrowing like 30-year mortgages attractive, but he expects significant inflation eventually.

"If you ever want to get a mortgage, today is the day to get a mortgage," Buffett said.-- AP