Warren Buffett once said he ‘loves it’ when the US stock market does this one thing

Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.

In the wake of President Donald Trump’s reciprocal tariff announcements, markets have see-sawed as investors try to find their footing — but depending on your investment perspective this might not be a bad thing.

For instance, legendary investor Warren Buffett is on record saying he’s fond of bear Markets.

“I love it when the things we buy go down. I get euphoric — you know the stocks are down today and I’m buying more of something I was buying yesterday — I’m buying it cheaper,” he said during an October 2014 interview with Fortune Magazine.

This advice could be as valid today as it was then.

In the first quarter of 2025, both the S&P 500 index and the Nasdaq Composite recorded their highest losses since 2022, breaking a five-quarter winning streak. During this time the CBOE (VIX) — often referred to as Wall Street’s “fear gauge” —  experienced one of its largest leaps at a 33.97 point increase on April 8, based on confusion surrounding U.S. reciprocal tariff policy. This was the largest jump the CBOE has seen in the last year.

Buffett’s approach offers a different way to view those unsettling red numbers in your brokerage account. He likened it to grocery shopping — where finding items at a reduced price is a win. Yet, when it comes to stocks, some investors don’t apply the same bargain-hunting mindset.

“They think that the stock knows more than they do, so that when the stock goes down, they say the stock is telling them something … they take it as kind of a referendum on themselves, me versus the stock: ‘If it ever gets back to what I paid, I’m going to sell it,’” he observed.

But for Buffett, a drop in stock prices signals the chance to get more for his money.

Buffett’s long-term investing approach has resonated with many. He recommends investors avoid short-term market noise and buy low-cost index funds instead, regardless of broader market conditions.

“If you’re worried about corrections, you shouldn’t own stocks,” Buffett said during an interview with The Street in 2015. “The point is to buy something you like at a price you like, and then hold it for 20 years. You should not look at it day-to-day.”

Consistently investing in a low-cost index fund can compound your wealth over time, thanks to dollar-cost averaging. For instance, if you routinely invest $20 every week for 20 years, you’ll end up with just over $51,300, assuming an annual compound interest rate of 8%.

Buffett believes that today’s investors have more flexibility than ever to potentially build their empire through stock investing.

But he also cautioned that this can be a double-edged sword. While it allows investors to make swift moves, it can also lead to hasty decisions.

“It’s a huge advantage which people turn into a disadvantage,” Buffett said, adding that making investments based solely on stock price movements is misguided.

“There is nothing about the price action of the stock that tells you whether you should keep owning [it].”

Read more: Rich, young Americans are ditching the stormy stock market — here are the alternative assets they’re banking on instead

Buffett believes that holding onto a stock should depend on what your expectations are for the company’s future performance, not how much it’s worth now.

This can be complicated to assess, especially amid rapid-fire economic policy changes. But Moby’s jargon-free market research can help you out.

Moby is run by a team of former hedge fund analysts, and their track record speaks for itself.

The platform’s stock picks have outperformed the S&P 500 index by 11.95% on average over the past four years. That’s on top of the index’s 10% annualized gains during this period. In fact, over 75 stock recommendations from Moby delivered returns greater than 100%.

With Moby Premium, you can access high-quality research in easy-to-understand reports from Wall Street veterans. Sign up today and become a smarter investor within minutes.

Historically, bear market conditions don’t last forever — even if they can drag during a deep recession. But short-term fluctuations are worrisome, especially if most of your wealth is concentrated in the stock market.

To protect yourself from market chaos, consider diversifying a portion of your portfolio into alternative assets that traditionally withstand the test of time.

Assets like real estate can sometimes offer much-needed relief.

New investing platforms are making it easier than ever to tap into the real estate market.

For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.

With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.

With risk-adjusted internal returns ranging from 12% to 18%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.

Gold — often considered a safe haven asset — can also be a diversifier. The precious metal can add value to your portfolio, with prices climbing past $3,000 per ounce this year.

Priority Gold is an industry leader in precious metals, offering physical delivery of gold and silver. Plus, they have an A+ rating from the Better Business Bureau and a 5-star rating from Trust Link.

If you’d like to convert an existing IRA into a gold IRA, Priority Gold offers 100% free rollover, as well as free shipping, and free storage for up to five years. Qualifying purchases will also receive up to $10,000 in free silver.

To learn more about how Priority Gold can help you reduce inflation’s impact on your nest egg, download their free 2025 gold investor bundle.

Alternative assets like art could also be valuable additions to your portfolio. Art has historically been negatively correlated with stocks — meaning they have been known to go up in value during a market downturn.

For decades, blue chip art was only accessible to the ultra-wealthy. In 2024, elite investors allocated as much as 25% of their total portfolios to art collections. But Masterworks is changing that. You can invest in fractional shares of works from artists like Banksy, Picasso, and Basquiat.

From their 23 exits so far, Masterworks investors have realized representative annualized net returns like +17.6%, +17.8%, and +21.5% among assets held longer than a year.

Get priority access and start investing in fine art within minutes.

See important Regulation A disclosures at Masterworks.com/cd

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.