The S&P 500 has been on fire in recent years, soaring to multiple new records amid excitement about the artificial intelligence (AI) boom. Though stocks across industries have advanced, AI stocks clearly have led the way.
In recent months, though, investors have started to worry about the sustainability of this three-year-old bull market and have questioned whether it will slip into bear territory. Headwinds have multiplied, from geopolitical tensions to rising inflation — and investors have even questioned whether major investments in AI infrastructure truly will bear as much fruit as expected.
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At times of growing uncertainty, it’s a great idea to turn to an expert for some wisdom. And in this situation, the best person to seek out is Warren Buffett. The billionaire’s investing success at the helm of Berkshire Hathaway for 60 years makes him the ideal person to offer us advice. As it turns out, Buffett isn’t at all worried about bear markets, and you shouldn’t be either. Here’s why.
Warren Buffett’s track record
Let’s start with a quick look at Buffett’s track record. The investing giant held the role of chief executive officer at Berkshire Hathaway for six decades, and during that time, he led the company to a compounded annual increase of almost 20%. This is compared to about 10% for the S&P 500 over that period. Buffett has always remained true to his investing principles, buying shares of quality companies in businesses that he understands and getting in on these players at reasonable prices.
Buffett hasn’t let himself get caught up in trends and doesn’t rush to get in on stocks in bull markets and flee during bear markets. Instead, he’s invested throughout market environments, a factor that has allowed him to seize opportunities at any moment.
The billionaire stepped down from his CEO role at the start of the year and handed over his chairman position just recently as part of his retirement. But he holds his seat on the board and is now chairman emeritus — and Buffett continues to participate in investing processes at Berkshire Hathaway.
Buffett shares his thoughts on tough markets
Now, let’s consider his thoughts on bear markets. As I mentioned earlier, he isn’t afraid of them, and we might even say he welcomes such down times. On many occasions, Buffett has illustrated this with his words, but one particular time stands out.
