The stock market’s ups and downs can rattle even the steadiest investor. While everyone hopes for gains, losses are inevitable. But legendary investor Warren Buffett once offered a refreshing perspective on how to handle those downturns.
“I love it when the things we buy go down. I get euphoric — you know the stocks are down today and I'm buying more of something I was buying yesterday — I'm buying it cheaper,” he said during an October 2014 interview with Fortune Magazine.
Buffett’s approach offers a different way to view those unsettling red numbers in your brokerage account. He likened it to grocery shopping, where finding items at a reduced price is seen as a win. Yet, when it comes to stocks, most investors don’t apply the same bargain-hunting mindset.
“They think that the stock knows more than they do, so that when the stock goes down, they say the stock is telling them something … they take it as kind of a referendum on themselves, me versus the stock: ‘If it ever gets back to what I paid, I'm going to sell it,’” he observed.
A drop in stock prices, for Buffett, signals the chance to get more for his money.
