Business & Investment

Warren Buffett: Keep investing and buy more in the market crash!

Let’s straighten this. Warren Buffett does not indicate an imminent market crash.

Omaha’s Oracle has certainly made some adjustments to his portfolio to adapt to the new era of high valuations we are in. He reduced his stake in financial stocks and added exposure to gold.In fact, I really like him adding a Canadian gold miner Barrick gold.. However, I think Fool’s contributor, Zitendra Parashar, mistakenly quoted Warren Buffett in a recent article. The market was on the verge of a terrible crash..

Let’s focus on the facts, as no one knows what is happening in the best minds of investing.

Low interest rates mean higher valuations may be here for some time

Stock prices have skyrocketed as interest rates near zero are expected to continue until 2024 and beyond. Many financial experts believe that the rise in valuations we see reflects this “new normal” monetary policy being implemented by central banks around the world. In other words, stocks can be priced correctly today. If you believe in the efficient market hypothesis, this makes sense.

Warren Buffett and most of the money managers there don’t currently have a jumping ship. Trimming is one thing, but selling it in full for fear of a market crash is not a long-term investment. Rather, Warren Buffett’s track record of picking up downcycle-beaten stocks is worth serious consideration for long-term investors. Long-term investors should consider keeping valuations as they are today and saving cash. That way, investors can buy stocks when they are trading at ridiculously low prices. This is the secret to success.

Anyone who wants to get Warren Buffett’s advice, “I’m afraid when others are greedy,” should. But it is dangerous to believe that the market will collapse tomorrow. This is because it may drive some long-term investors out of the market. Indeed, many investors who sold at low prices in March, withdrew from the market, and failed to re-enter, missed a pretty good year last year.

Money has nowhere else to go

Yes, stocks are currently expensive. The problem is that at current (essentially zero) bond rates, money has nowhere else to go. Indeed, capital (or liquidity) is as liquid as water and flows where it can produce the highest returns. In this current macroeconomic environment, capital goes to only one place. This means that investors will have to get used to these valuations or stay out of the market for the next few years.

Warren Buffett didn’t sell everything and went home, so I think he believes it’s worth keeping whatever volatility can occur. Investors should be aware of headlines that warn of an imminent market crash. Most of the greatest money managers out there believe that the economic situation is ready for recovery. This is a very different outlook. Betting on market trends has been disastrous in the last decade. It was a long way to continue investing.

If you have a long investment period like Buffett, please continue to invest. Buy market fix. But don’t overreact to the possibility of market implosion.

Here are some of the top stock picks that Warren Buffett wants right now:

10 Best Stocks to Buy This Month

Ian Butler, a well-known Canadian investor, has nominated 10 shares for Canadians to buy today. So if you’re tired of reading about getting rich in the stock market, today may be a good day for you.
The Motley Fool Canada offers 65% off the list price of the best stock selection service, plus a full money-back guarantee on the amount you pay for the service. Click here to find out how to take advantage of this.

Click here for more information on today.


Stupid contributor Chris Macdonald There are no positions in any of the listed stocks.

Warren Buffett: Keep investing and buy more in the market crash!

https://www.fool.ca/2021/01/23/warren-buffett-stay-invested-and-buy-more-on-a-market-crash/ Warren Buffett: Keep investing and buy more in the market crash!

Back to top button