The lesson of “playing” stocks of Warren Buffett when the market is on fire

The majority of stocks are facing a prolonged sell-off, which has profoundly affected some of the biggest names in the securities industry.

As reported by CNBC, the Dow Jones Industrial Average’s seven-week decline was its longest since 2001, while the S&P 500’s six-week decline was its longest since June 2011.

While many investors who save for retirement may wonder what to do in such a volatile market, Warren Buffett says the answer is simple: Try not to worry too much about it. . CNBC echoes Warren Buffett’s advice in 2016: “I would advise people not to watch the markets too closely when they drop sharply.”

The billionaire added that investors who buy “reputable company” stocks over time will see results in 10, 20, and 30 years from now. According to Buffett, investors who buy stocks of reputable businesses will see results in the long term, while the fast speculators will end up “not having good results”.

“Money is made from investments in good companies over the long term. That’s the real game stock… If you try to buy and sell stocks, worry when the price goes down and want to take profits when the price goes up, there will be no good results,” said billionaire Buffett.

Many experts, including Buffett, also recommend buying index funds, which are automatically diversified and hold every stock in an index. For example, the S&P 500 includes major US companies like Apple and Amazon.

Like Buffett, the late legendary investor Jack Bogle also recommends a buy-and-hold strategy. He previously told CNBC that buying and holding stocks is the best way to invest because “your emotions will beat you” if you try to sell your stock to avoid losses and make a profit. capital recovery later.

“Be calm, don’t let market changes, even big fluctuations like the financial crisis, affect you. Never buy or sell continuously. Always keep a certain amount of securities. certain securities,” said Bogle, an investor.

In the same opinion, financial expert Ashton Lawrence of Goldfinch Wealth Management said that diversifying investments or buying reputable stocks, aiming for long-term investment is a wise choice at this time.