Worried About the Stock Market? This Is Warren Buffett’s Best Investing Advice
David Dierking, The Motley Fool
Fri, July 31, 2026 at 12:17 AM GMT+5:30
3 min read
- NVDA
+2.41% - ^GSPC
+1.76% - SMH
+7.05%
The S&P 500 is still within a stone’s throw of its all-time high, but the Nasdaq-100 is nearly in correction territory. It’s more than 9% below its high, which was last reached at the beginning of June
The biggest offenders are semiconductor stocks. The VanEck Semiconductor ETF has fallen more than 20% in only a month and a half. Considering that a lot of investors are heavily allocated in these stocks as a result of the artificial intelligence boom, it’s safe to say that some of them are in panic mode
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
But if you follow the advice of Warren Buffett, this could be a time of opportunity
Buffett’s most important piece of advice
If you have listened to Buffett over his illustrious career, you know that he prefers high-quality, value-leaning stocks. One of his most-quoted lines is: “It’s better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
But that’s not the quote I find most appropriate for today’s environment. Sometimes, a company’s stock needs to be beaten down a bit for the proper level of value to emerge. This is the Buffett quote investors should consider here: “Be fearful when others are greedy, and greedy when others are fearful.”
As tech stocks decline, investors are going to grow more fearful. The ones who panic are likely to come out behind in the end; the ones who stay the course can take advantage of those who panicked
Why Buffett’s advice works today
There’s a long history of investors acting as their own worst enemies when volatility rises and stock prices decline. Too many people will say, “I need to get out” only after stock prices fall. They sell and end up locking in losses
But they usually don’t get back in until long after the recovery has already started. In total, they have accepted the losses, missed out on the gains, and done considerable damage to their long-term plans and returns
Buffett’s advice encourages the opposite. When investors get nervous and start heading for the exits, that’s the time to begin buying. While others are selling low and buying high, anybody who chooses to be “greedy when others are fearful” can buy low and enjoy any eventual turn higher
Buffett was buying stocks during the depths of the financial crisis in 2008. Clearly, he puts his own advice into practice. If you have the discipline to follow his advice and swim upstream during tough times, it could turn out to be quite lucrative
