Warren Buffett: "There are only 2 things you need to do to survive when stock prices are falling"

Stocks may be teetering on the brink of a bear market, but now is not the time to panic.

While the Dow and S&P 500 are both on track for the worst losses in a decade, as Business Insider's Callum Burroughs r eported, it's important to remember the oft-repeated advice of Warren Buffett, the billionaire investor and founder of Berkshire Hathaway: "Be fearful when others are greedy and greedy only when others are fearful."

As MoneyTalksNews pointed out, Buffett reiterated some of his best advice for sustaining wealth during a bear market in his 2017 letter to shareholders: Stay in the market and buy at a bargain.

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. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well."

In other words, don't fall into widespread panic and begin selling off stocks, because wealth-generating investments are long term.

"American business — and consequently a basket of stocks — is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that ... Many companies, of course, will fall behind, and some will fail," he wrote.

Most importantly, it's impossible to predict when economic crises will happen, Buffett said, but they're inevitable.

Source: Business Insider

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