Warren Buffett: Stocks are on fire, don’t look at the electronic board

Although the market has shown signs of recovery in recent sessions, in fact, US stocks are witnessing a prolonged sell-off, in which stocks of many “big guys” are no exception.

According to a report by CNBC, ending the trading session on May 18 (US time), the Dow Jones Industrial Average fell 1,164, or 3.57%, to 31,490 points. This is the largest average drop since June 2020.

With this drop, the Dow Jones closed at its lowest level since March 2021. Notably, this is the 5th time that the Dow Jones has dropped more than 800 points after just one trading session, all within the past 1 month.

Similarly, the S&P 500 index also fell as much as 4.04% to 3,923 points. This is also the worst drop since June 2020. The Nasdaq Composite, meanwhile, fell 4.73% to 11,418 points, its biggest drop since May 5.

When many investors who are saving money for retirement don’t know what to do in the midst of volatile markets, Warren Buffett offers a very simple answer: Try not to worry too much about it.

According to Warren Buffett, investors who buy stocks in “good companies” over time will pay off 10, 20, and 30 years from now.

In an interview with CNBC in 2016, the investment legend emphasized: “I would tell investors, don’t watch the market closely.”

Warren Buffett adds that investors who buy stocks in “good companies” over time will pay off 10, 20, and 30 years from now.

“If they’re trying to buy and sell stocks they’re not going to get good results. Money is made by investing, owning good companies over time. This is also what people should do with stocks. votes,” he added.

Many experts including Warren Buffett recommend investors to join Index Funds (Portfolio Management Funds) to limit risks in the context of strong market volatility. .

Like Buffett, the late legendary investor Jack Bogle also recommends a buy-and-hold strategy.

Also in a conversation with CNBC, Jack Bogle said, buying and holding stocks is the best way to invest because “emotions will defeat you completely if you try to sell your stocks to avoid losses and capital recovery”.

“Let’s go in the right direction,” said Mr. Bogle in 2018. “Don’t let these changes in the market, even big changes like the financial crisis, change your mind. never, for all or completely out of the market. Get involved to a certain extent,” the legend added.

Trying to react to market fluctuations can often backfire, according to experts

Speaking to CNBC, financial experts said that, for most investors, trying to react to market volatility often has the potential to backfire. It is best to wait through strong market fluctuations.

“If you have a diversified portfolio, if you go into a few index funds and you have a long enough run, that’s the best way to ride out the current ‘market roller coaster’.” now,” said Ashton Lawrence of Goldfinch Wealth Management.

Sean M. Pearson, a financial advisor at Ameriprise Financial, also said that investors selling out when the market is down can derail the long-term plans of large companies.

“The market doesn’t settle down, it settles down. By the time the news looks a little better, the market has recovered. And if you miss the recovery, you’re likely going to have a hard time hitting your targets. my financial goals,” said Mr. Sean M. Pearson.

To conclude, most experts advise investors not to check their accounts every day.

“I’ve been a professional investor for over 20 years. I don’t log into my account very often these days. For many people, not staring at the electronic board may be the best way to go. help them sleep at night,” Mr. Pearson emphasized.

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