Warren Buffett Predicted 'Major' Stock Market Declines and 'Traumas' But Said You Should Never Forget These 2 Things During Such 'Scary' Periods

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(NYSE:BRK, BRK.B)) shareholders, Buffett said that quality businesses in the country are "virtually certain" to see their worth increase in the coming years. However, he warned that many companies could be left behind due to occasional market downturns.Buffett said no one can predict market declines and "traumas" but offered advice for investors on how to respond when they occur.Don't Miss:Fast Company Calls It a ‘Groundbreaking Step for the Creator Economy' — Investors Can Still Get In at $0.85/ShareAmericans With a Financial Plan Can 4X Their Wealth — Get Your Personalized Plan from a CFP Pro"The years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks," Buffett wrote. "During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted."Since Buffett's comments, the S&P 500 has posted double-digit gains every year except in 2018, when the index fell about 4.4%, and in 2022, when it dropped roughly 18%.Buffett said in his 2016 letter that investors who can simply overcome their personal fear and sit through market volatility with their investments in large and "conservatively financed" businesses will "almost certainly do well."Trending: Have $100k+ to invest? Charlie Munger says that's the toughest milestone — don't stall now. Get matched with a fiduciary advisor and keep buildingBuffett cautioned investors to remain wary of naysayers who thrive on "gloomy forecasts" and said entrepreneurial spirit, productivity gains, abundant capital and innovation will continue to drive the U.S economy higher."No one can tell you when these traumas will occur," he said.Buffett said that he believes Berkshire's normalized earnings per share will continue to grow every year, and its strong business portfolio and financial strength will allow the company to deliver solid results in the future.See Also: Buffett's Secret to Wealth? Private Real Estate—Get Institutional Access YourselfDespite year-to-year swings, Berkshire's EPS rose overall since Buffett's 2016 letter through the end of 2024.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,858.47 +12.97 (+0.19%)Dow 3048,382.39 +319.10 (+0.66%)Nasdaq23,235.63 -6.36 (-0.03%)Russell 20002,508.22 +26.32 (+1.06%)VIX14.51 -0.44 (-2.94%)Gold4,329.60 -11.50 (-0.26%)Trending tickersBTC-USD Bitcoin USD 90,001.50 +199.98 (+0.22%)CVX Chevron Corporation 155.90 +3.49 (+2.29%)CL=F Crude Oil Feb 26 57.32 -0.10 (-0.17%)XOM Exxon Mobil Corporation 122.65 +2.31 (+1.92%)XRP-USD XRP USD 2.00 +0.01 (+0.52%)PortfolioSign in to access your portfolioSign inTop gainersFLNC Fluence Energy, Inc. 23.01 +3.23 (+16.33%)SNDK Sandisk Corporation 275.24 +37.86 (+15.95%)SMR NuScale Power Corporation 16.31 +2.14 (+15.10%)BIDU Baidu, Inc. 150.30 +19.64 (+15.03%)ASTS AST SpaceMobile, Inc. 83.47 +10.84 (+14.93%)Top losersPAY Paymentus Holdings, Inc. 28.47 -3.12 (-9.88%)KVYO Klaviyo, Inc. 29.32 -3.15 (-9.70%)LQDA Liquidia Corporation 31.40 -3.09 (-8.96%)APP AppLovin Corporation 618.32 -55.50 (-8.24%)PSNY Polestar Automotive Holding UK PLC 19.81 -1.56 (-7.30%)Most activeONDS Ondas Holdings Inc. 11.02 +1.26 (+12.91%)NVDA NVIDIA Corporation 188.85 +2.35 (+1.26%)PLUG Plug Power Inc. 2.2300 +0.2600 (+13.20%)INTC Intel Corporation 39.38 +2.48 (+6.72%)TSLA Tesla, Inc. 438.07 -11.65 (-2.59%)Top economic eventsEarnings eventsMy earnings eventsEarnings events