Warren Buffett’s One Move: Keep Buying Through Market Pullbacks

The useful part

Even when there have been corrections over the past few years, they've been retraced pretty quickly on the way to new highs. Not much time is being spent worrying about the downside of investing in stocks. Warren Buffett has spent the last several decades explaining why pullbacks aren't necessarily a bad thing.

How it works

• Expand NYSE: BRKA Berkshire Hathaway Today's Change (-0.28 %) $ -2,068.38 Current Price $ 751,299.49 Key Data Points Market Cap $1.1T Market cap calculated using publicly traded shares outstanding only.
• Buffett argues that his "buy the dip" strategy only works if you keep investing throughout the drawdown.
• This is how savvy investors can improve their portfolio outcomes over time.
• In his 1997 letter to Berkshire Hathaway (BRKA -0.28%) (BRKB -0.33%) shareholders, Buffett indicated that long-term investors should hope for multiple opportunities to buy stocks on sale.

What to take from it

Result: $1,400 invested, 2.11 shares owned, $663.16 average cost per share. Stocks Mentioned S&P 500 Index SNPINDEX: ^GSPC $7,717.08 (+0.60%) +$46.24 Motley Fool Stock Advisor ' s Latest Pick Get Access ---% Avg Return *Average returns of all recommendations since inception. Result: $1,400 invested, two shares owned, $700 average cost per share.

Example or evidence

• Have a plan in mind before anything happens, and then execute it.
• Buffett said, "Only those who will be sellers of equities in the near future should be happy at seeing stocks rise.
• Prospective purchasers should much prefer sinking prices." His suggestion is very simple.
• Lower prices can create better long-term opportunities If you're someone investing, say, $700 a month into the Vanguard S&P 500 ETF (VOO +0.62%), any dip in the share price gives you the opportunity to...

Details worth keeping

In fact, investors might even actually want one every once in a while. When stock prices fall, keep buying at discount prices. More shares mean bigger growth opportunities over time.

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