By Mallika Mitra
Young investors rattled by the ups and downs of the stock market amid the war, economic uncertainty and artificial intelligence's disruption are looking for guidance on what to do -- or not do -- with their money.
The best person to offer them advice may be a 95-year-old retiree: Warren Buffett.
Buffett is lionized for his investing record during six decades atop holding company Berkshire Hathaway, which owns everything from See's Candy to natural gas pipelines to Apple shares. But he also became renowned for his practical approach to investing, centered around finding undervalued stocks and holding them for the long term.
Buffett stepped down as CEO of Berkshire at the end of last year, but he is still a go-to expert for people looking to build wealth. In a recent interview with CNBC, the investing legend continued to offer up insights that today's investors who are just starting out their journey in the financial markets can use to stomach volatility and reach their goals.
Market Corrections Are Normal
In late March, the Dow Jones Industrial Average and Nasdaq Composite entered correction territory amid concerns for the tech sector and geopolitics. Buffett was unworried.
"Three times since I've taken over Berkshire, it's gone down more than 50%," Buffett told CNBC. "This is nothing."
If you are investing for decades -- which is the likely reality for people in their 20s and 30s -- you will see your share of market downturns. That doesn't make them less scary.
Thomas Balcom, founder of 1650 Wealth Management in Lighthouse Point, Fla., recently heard from a 20-year-old University of Michigan student whose portfolio had declined approximately 10% from its peak. The investor has a small account invested in an S&P 500 index fund and he was wondering if he should sell his shares and reallocate elsewhere.
"He had not experienced a decline before, so he was a bit spooked," Balcom says. "You're conditioned to think that the market only goes one direction, and it has for the last few years. So this pullback is kind of unnerving for folks who've never experienced it before."
After Balcom explained that the portfolio was well diversified and this was a short-term blip, the investor decided to stay the course and not make any changes to his portfolio. That could have consequences down the road, since selling during a downturn can mean missing out on a recovery.
A $10,000 investment in the S&P 500 in 2006 would have grown to roughly $81,000 by the end of 2025 if investors stayed the course. But if they missed the market's 10 best days? That balance would be just about $36,000, according to J.P. Morgan Asset Management.
Diversification Helps Protect Against Unpredictable Markets
When asked how much major tech stock prices would have to fall to become attractive again, Buffett said, "I have no idea what the stock market's going to do, and I don't think anybody else does either."
Even for Wall Street professionals paid to pick promising stocks, it's tricky to get those calls right. That's why so many experts, Buffett among them, recommend that everyday investors buy low-cost, well-diversified index funds. Diversification helps a portfolio weather volatility because if one area of the market tanks, you are likely exposed to another area that will hold steady or even rise.
Balcom says for younger clients, he typically gets them started by investing in the Schwab 1000 Index exchange-traded fund, which offers exposure to 1,000 of the largest U.S. companies and charges an expense ratio of 0.03%. For investors looking for a broader fund, Morningstar says the Fidelity Total Market Index ETF, iShares Core S&P Total US Stock Market ETF, Schwab Total Stock Market Index fund, and Vanguard Total Market Index fund are among the best total-market funds.
Focus on Solid Investments, Not Speculative Ones
When asked whether he is waiting for the next big drop in the market to deploy, Buffett said yes, but only "because stocks are attractive or businesses are attractive to us, and we are not planning to sell them next week or next month." Buffett was known for keeping enough cash on the sidelines that he could take advantage of opportunities as they arose, but he wouldn't just shell out cash for just any name. He would invest in stocks with long-term potential, not those with short-term hype.
Thomas Van Spankeren, the Chicago-based chief investment officer of RISE Investments, recently had to remind a client of why investing for the long term is important even when offered exciting, trendy investments.
"Young investors tend to own stocks in flashy sectors and industries like technology," he says. "Those types of companies have really taken it on the chin recently. They respond more to things like higher interest rates and decreased liquidity conditions."
Van Spankeren advised the client to rebalance his portfolio to include dividend, small-cap, and overseas stocks. It has made an impact this year, he adds.
"Buy and hold is very important, but you also need to know what you own, " Van Spankeren says.
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This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 08, 2026 02:30 ET (06:30 GMT)
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