Warren Buffett advises against owning stocks if you're concerned about the 7.5% decline in the S&P 500.

On Monday, U.S. stocks experienced a significant decline as part of a worldwide stock market downturn caused by increasing concerns about a possible recession among investors.

The disappointment of the July jobs report on Friday sparked concerns that the Federal Reserve has not acted quickly enough to lower interest rates, which could ease some economic strain. Additionally, unusual currency trading from Japan is further destabilizing global markets.

The S&P 500, which gauges the overall performance of the US stock market, dropped approximately 2% in early trading, leaving it 7.5% below its all-time high on July 16. If the market continues to decline, it may enter correction territory, defined as a 10% or greater drop from the peak. Despite this, the S&P has still risen 10.5% since the beginning of the year.

Warren Buffett's divestiture of half of Berkshire Hathaway's holding in Apple stock and its ample holding of safe-haven Treasury bills has fueled investor suspicion about the strength of the market.

Is the Oracle of Omaha signaling the end of the bull market by selling a hot tech stock and buying bonds?

According to Buffett, if you're a long-term investor, it's wise to disregard short-term fluctuations in the stock market.

In a 2015 interview with The Street, Buffett stated that if you're concerned about corrections, you shouldn't own stocks.

He stated that it is a grave error to view stocks as fluctuating and to solely focus on those fluctuations.

Keep your eyes on the long-term prize

Buffett advised that when saving for a long-term goal like retirement, it's not necessary to worry about what happens on a specific day, week, or year.

"If you own a stock, it's inevitable that it will decline at times. So, why worry about it?" he advised. "The key is to purchase something you enjoy at a price that suits you, and then hold onto it for 20 years. Don't obsess over it daily."

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Buffett is renowned for value investing, which involves purchasing stocks in companies that are undervalued. However, identifying bargains in the market requires expertise and dedication, as Buffett and other investors have demonstrated. Buffett recommends a more straightforward approach for the average investor.

Practically all of the time, owning a diversified portfolio of low-cost index funds makes the most sense for long-term investors, as previously stated by him to CNBC.

"Buffett advised in a 2017 interview to consistently purchase a low-cost S&P 500 index fund and to keep buying it regardless of market conditions, particularly during tough times."

It appears that the market is currently experiencing a thin period, compared to last week. To adhere to Buffett's advice, it would be prudent to implement a dollar-cost averaging strategy, which involves investing a fixed amount of money into a diversified portfolio at regular intervals. This approach ensures that you purchase fewer shares when stocks are overpriced and more when the market experiences a downturn.

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