What Advice Has Warren Buffet Given on Coping with Market Downturn?
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Warren Buffett’s steady-hand philosophy is resurfacing amid renewed investor anxiety, in the wake of steep market drops triggered by tariff announcements by President Donald Trump.
The Berkshire Hathaway chairman and CEO, known as the “Oracle of Omaha,” has often counseled that sharp declines in the stock market can represent opportunities rather than risks.
Why It Matters
Last week, the Dow Jones Industrial Average dropped by more than 1,400 points and the S&P 500 fell into correction territory, defined as a decline of 10 percent or more from recent highs, following Trump’s “Liberation Day” tariff announcement. European stocks also fell by over 4 percent.
The policy change has raised fears of a renewed trade war and global economic slowdown, pushing investors toward hasty exits.
Despite this, Buffett is the only person in the top ten U.S. Rich List who has continued to make gains in his estimated net worth, making his advice particularly valuable to those looking to protect their own wealth.
What To Know
Buffett has said that he will not be commenting directly on the Trump tariffs or the stock market’s response until Berkshire’s annual meeting in May.
However, he has previously criticized the use of tariffs to push economic policy, describing them as “a tax on goods”.
“I mean, the tooth fairy doesn’t pay them! And then what? You always have to ask that question in economics. You always say, ‘And then what?'” Buffett said in March, a month before Trump’s policy was announced.
Additionally, in 2019, Buffett said: “If we actually have a trade war, it will be bad for the whole world. Everything intersects in the world. A world that adjusts to something very close to free trade… more people will live better than in a world with significant tariffs and shifting tariffs over time.”
Berkshire Hathaway’s CEO Warren Buffett (left) and his business partner Vice Chairman Charles Munger answer questions at a news conference May 4, 2003 in Omaha, Nebraska. Berkshire Hathaway’s CEO Warren Buffett (left) and his business partner Vice Chairman Charles Munger answer questions at a news conference May 4, 2003 in Omaha, Nebraska. Getty Images
Buffett’s consistent message amounts to: avoid panic, stay the course, and seize undervalued investments during crises. Buffett has previously cited lines from Rudyard Kipling’s poem If, for advice during periods of market turmoil:
“If you can keep your head when all about you are losing theirs … If you can wait and not be tired by waiting … If you can think—and not make thoughts your aim … If you can trust yourself when all men doubt you … Yours is the Earth and everything that’s in it.”
In a 2008 New York Times op-ed, Buffett suggested that stock market declines could be an opportunity to buy in at discounted prices, writing: “Bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.”
What People Are Saying
In 2008, Warren Buffett wrote: “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors.
“To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense.”
What Happens Next
Berkshire Hathaway’s annual meeting on May 3 will likely draw added attention this year, as Buffett may elaborate on his views regarding tariffs and long-term investment plans.
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