If you could only listen to one person’s advice during a stock market crash, let that person be famed investor, Warren Buffett. Not only will the Berkshire Hathaway (NYSE: BRK-B) (NYSE: BRK-A) chairman and CEO’s advice serve you well, but his knack for keeping a clear head — and even getting a bit greedy (more on that later) — when everyone else is selling, may make his the only advice you need to navigate uncertain times.
Indeed, Buffett’s ability to tune out the noise and remain optimistic amid these downturns has played a vital role in his unrivaled performance over decades. Between 1965 and the end of 2017, Berkshire’s market value has increased at an annualized rate of 20.9%, more than doubling the S&P 500‘s average annual growth of 9.9% during this same period. This 20.9% annualized growth rate for Berkshire’s market value translates to a total return of 2,404,748%, obliterating the S&P 500’s 15,508% gain during the same timeframe.
Notably, this performance was achieved amid a number tumultuous financial periods, the 1973-74 stock market crash, Black Monday, the bursting of the dot-com bubble, a sharp pullback after the September 11 attacks, and the more recent Great Recession between December 2007 and June 2009.
Suffice to say, Buffett knows a thing or two about stock market crashes. So, without further ado, here’s some advice from the Oracle of Omaha regarding inevitable market downturns.
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