Worried About a Stock Market Crash? Here's What Warren Buffett Has to Say About It.

The stock market has been thriving over the past two years, but there's still plenty of uncertainty among investors.

The Federal Reserve Bank of New York estimates that there's around a 29% chance of a recession in the next 12 months, and factors like a new presidential administration and concerns surrounding a potential interest rate hike could lead to more anxiety surrounding the market's future in 2025.

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While nobody can say exactly what the market will do this year, it doesn't hurt to start preparing. If you're concerned about a potential market downturn, this timeless advice from Warren Buffett could help ease your concerns -- and set you up for financial success.

Image source: The Motley Fool.

Bad news is good news for investors

In an October 2008 opinion piece for The New York Times, Warren Buffett gave his thoughts on stocks and how he's investing for the future. The market was nearly one year into the Great Recession, and millions of Americans were feeling anxious and discouraged.

Buffett offered an optimistic reminder, though, that even the worst recessions are only temporary, and the best investors can find the silver lining in tough times.

"[I]n the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank," he explained. "In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price."

While stock prices are still surging for now, if the market does take a turn for the worse later this year, that could be a fantastic buying opportunity for savvy investors. When stock prices fall, you can snag high-priced stocks at a fraction of the cost -- while also reaping the rewards when the market recovers.

For example, say you had invested in an S&P 500 index fund in October 2008, when Buffett wrote his piece. Stock prices had been falling for months and wouldn't start to bounce back until mid-2009. But if you'd simply stayed in the market, you'd have seen total returns of around 152% within 10 years -- more than doubling your money.

^SPX data by YCharts

"Let me be clear on one point," Buffett continued in the article. "I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month or a year from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."

Buffett's go-to investing strategy

There's no single correct way to invest, but no matter where you choose to buy, it's important to do your research and focus on long-term growth over short-term gains.

In Berkshire Hathaway's 2021 letter to shareholders, Buffett offered some insight into his and then-partner Charlie Munger's approach to investing.

"Please note particularly that we own stocks based upon our expectations about their long-term business performance and not because we view them as vehicles for timely market moves," he explained. "That point is crucial: Charlie and I are not stock-pickers; we are business-pickers."

Strong businesses are more likely to pull through periods of volatility, making them the best choices for long-term growth. By investing in companies with solid fundamentals and long-term growth potential, your portfolio has a far better chance of succeeding no matter what the market throws at it.

Feeling anxious about the market's future is normal, especially in uncertain times. But the market's short-term performance doesn't matter as much as its long-term potential. No matter what may lie ahead, the future is promising.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.