Should You Buy Stocks in the Nasdaq Correction? 6 Words From Warren Buffett Offer a Strikingly Clear Answer.

2 months ago 41

Unlock banal picks and a broker-level newsfeed that powers Wall Street.

Adria Cimino, The Motley Fool

Sun, Mar 23, 2025, 3:10 PM 5 min read

Last year, Nasdaq stocks -- from Nvidia to Palantir Technologies -- pumped up the show of galore portfolios. Investors piled into these high-growth names, and the information that these players are progressive successful the booming artificial quality manufacture made their stories adjacent brighter. The scale finished the twelvemonth with a double-digit gain, pursuing a double-digit summation successful 2023, and the momentum continued into the aboriginal days of this year.

But successful caller weeks, the Nasdaq has mislaid its glow -- astatine slightest for now. The benchmark slipped into correction territory, falling much than 10% from its latest precocious backmost successful December, amid concerns astir the interaction that President Donald Trump's tariffs connected imports whitethorn person connected the economy. Though the Federal Reserve said past week that it mightiness chopped rates doubly this year, the cardinal slope besides expects higher inflation, and Chair Jerome Powell says that anticipation is linked to the tariffs.

Against this backdrop, you whitethorn beryllium wondering whether present is the close clip to invest. In these sorts of situations, it's a large thought to crook to the contented of idiosyncratic who has experienced the ups and downs of the banal marketplace and scored a triumph implicit the agelong term. I'm talking astir billionaire capitalist Warren Buffett. Should you bargain stocks successful the Nasdaq correction? Six words from Buffett connection a strikingly wide answer.

Warren Buffett is seen astatine an event.

So, first, a speedy enactment astir Buffett's successes and strategy. At the helm of Berkshire Hathaway, he's helped present a compounded yearly summation of astir 20% from 1965 done the extremity of past year. That's compared to the S&P 500's summation of astir 10%. That benignant of outperformance demonstrates the billionaire's cognition of the market, meaning we mightiness reap rewards if we travel his advice.

As for strategy, Buffett doesn't unreserved to get successful connected trends. In fact, helium doesn't peculiarly similar them and alternatively aims to bargain prime companies with staying powerfulness astatine tenable oregon bargain prices. For example, he's held players similar Coca-Cola and American Express for years, and successful his 2023 shareholder letter, helium wrote that helium didn't program connected letting them spell immoderate clip soon.

Last year, with indexes galloping higher, Buffett wasn't a large purchaser of stocks. In fact, helium was a nett seller to the tune of $134 billion, and that helped Berkshire Hathaway physique up a grounds currency level of $334 billion. Buffett adjacent made a shocking move, selling his full positions successful 2 scale funds that way the S&P 500: the SPDR S&P 500 ETF Trust and the Vanguard S&P 500 ETF. Historically, Buffett has been a instrumentality of these investments and has adjacent acceptable retired a program for astir of his cash, upon his death, to spell into an S&P 500 scale money for the payment of his wife.