Warren Buffett Has Seen His Share of Market Downturns. His Message to Investors: Keep Your Cool.

The stock market has been rather turbulent through the first quarter of 2025, and with the uncertainty surrounding tariffs, interest rates, and recession fears, there's no way to know when that will change. The S&P 500 benchmark index recently dipped into correction territory, and although it is now down by about 9% from recent highs, the Nasdaq Composite and Russell 2000 small-cap index are still down by more than 10%.

Let's put things in perspective. As far as stock market corrections go, this has been a rather tame one -- so far, at least.

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In addition, it's important for investors to realize that corrections are a normal part of investing. Since 1980, the stock market has declined by 10% or more from its recent highs every 1.2 years on average. There were five separate drops of 10% or more in 2020, four in 2022, and one correction in 2023. But there haven't been any market corrections since Fall 2023, so it understandably feels painful to many investors.

Warren Buffett on market downturns

During turbulent times like this, there's some timeless wisdom from legendary investor Warren Buffett that can help you not only get through a correction, but emerge on the other side in even better shape than you went in.

Buffett writes a letter to Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) shareholders each year, and in the 2017 edition, he shared lines from a Rudyard Kipling poem that he advised investors to put into action during major market declines:

"If you can keep your head when all about you are losing theirs ... If you can wait and not be tired by waiting ... If you can think -- and not make thoughts your aim ... If you can trust yourself when all men doubt you -- Yours is the Earth and everything that's in it."

While Kipling obviously wasn't writing specifically about stock market declines, the message here is simple. Buffett is advising investors to not panic, be patient when deciding what moves to make, and trust their abilities as investors.

One of the worst things you can do during a market decline is to panic and sell. There are many investors who did exactly that during the 2007-2009 bear market or during the 2020 COVID-19 pandemic crash, and who now almost certainly regret it.

Stick to the plan of long-term investing during market downturns. Keep buying shares of great companies and exchange-traded funds as the market declines, knowing that if you measure your returns in decades, you'll look back and know you bought at a discount.

Be prepared to trust the process

As Buffett also wrote in the same letter: "No one can tell you when these will happen. The light can at any time go from green to red without pausing at yellow."

Sure, market corrections and crashes can be scary, especially when they seem to come out of nowhere. It seems like just weeks ago (and it was) when the S&P 500 was reaching new all-time highs. And nobody enjoys watching their net worth decline sharply.

However, if you keep a level head, market downturns can be excellent opportunities for patient long-term investors to stay the course, and to consistently invest in great businesses regardless of what the stock market or economy is doing.

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Matt Frankel has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.