12 Warren Buffett Quotes to Adhere to in Today's Market

Warren Buffett is one of the most respected investors of our time. Known as the Oracle of Omaha, he led his company Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) to outperform the S&P 500 consistently for decades -- and by a double-digit margin. He is also the world's fourth-wealthiest person, according to Forbes. So, it's safe to say Buffett knows a thing or two about investing and creating wealth.

Fortunately for the rest of us, Buffett is also generous about sharing his expertise. Even better, he has a knack for communicating complex ideas in an easygoing, down-to-earth way. Here are 12 of Buffet's timeless, insightful quotes that can help you navigate today's market.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

"The years ahead will occasionally deliver major market declines -- even panics -- that will affect virtually all stocks. No one can tell you when these traumas will occur."

Buffett has a practical attitude about market crashes and corrections. They happen fast, they can be severe, and they're usually unexpected. Understanding that can spare you a fair amount of emotional turmoil when the inevitable happens -- whether that's in 2021 or three years from now. You can skip over the part where you shake your fists at the sky and jump right into choosing your next move.

Of course, your next move may be to do nothing. Because when you're well aware of how quickly the market climate can change, you're more inclined to maintain a portfolio that can handle some turbulence.

ALSO READ: Warren Buffett's 3 Biggest Stock Picks for 2021

"No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant.”

Generating wealth in the stock market is vastly easier when you have time on your side. Consider this: If your portfolio is growing with the market at 7% each year, your balance will double in about 10 years and then again 10 years after that. That means you can turn $100,000 into $400,000 in a couple decades by simply riding along with the market.

But turning your $100,000 into $400,000 in half the time is a far more difficult task. You'd need to achieve consistent annual growth of 14% for 10 years straight. That's well over the stock market's long-term average, and probably unrealistic for most investors.

The takeaway? Give your portfolio time to grow. If you try to rush the process, you may not get the results you want.

“I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.”

Many investors have lost money in the stock market by following the tide. Share prices rise and investors buy in, hoping to get a piece of the action. Share prices fall and they get spooked and sell. It doesn't take a mathematician to see that this pattern leads to selling low and buying high -- the opposite of what it takes to make money.

Buffett recognizes that market volatility creates opportunity for the investor who's willing to go against the tide. When share prices dip, that's your chance to pad your share counts for less. When the market's running hot, that might be the time to pause before buying and evaluate whether the investment really fits in your strategy.

"Do not take yearly results too seriously. Instead, focus on four- or five-year averages."

The year of 2020 demonstrates this concept perfectly. If you had to make investing decisions based solely on 2020 earnings reports, you wouldn't buy stock in airlines, cruise lines, restaurants, or retail chains. But as you know, the circumstances that upended those and other sectors last year are temporary.

Buffett's history with insurer GEICO is also a case study on the importance of taking a longer-term view. In the late 1970s, Buffett invested about $24 million in GEICO common shares and convertible preferred stock. At the time, the company was nearly bankrupt. With the help of a new CEO, GEICO would turn things around and achieve profitability the next year. The insurer is now wholly owned by Berkshire Hathaway and still stands as one of Buffett's most profitable picks.

ALSO READ: Got $5,000? 5 of the Best Buffett Stocks to Buy Now

"If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes."

Buffett famously takes a buy-and-hold approach to investing. This is a passive style that involves choosing high-quality companies that you can keep your portfolio for years. It's the opposite of day trading, where investors try to make quick profits from short-term share price fluctuations.

Passive investing is less risky than frequent trading. It's also easier to implement successfully. You don't need a crystal ball to turn a profit when you are holding companies for the long term. You only need to choose established companies with good track records and then wait.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

"Success in investing doesn't correlate with IQ ... what you need is the temperament to control the urges that get other people into trouble in investing."

Emotions may be an investor's worst enemy. Desperation and overconfidence can encourage you to take on too much risk, while fear can prevent you from acting on opportunities. Having those emotions is natural, but acting on them can be costly.

To keep those emotional decisions in check, try writing down your investment goals and strategy. Then, revisit that documentation before each trade. Buffett would have you go one step further and also write down the logic behind each new investment. You can keep those notes and review them later, too. With the benefit of hindsight, you're likely to see opportunities to improve your decision making.

"If you like spending six to eight hours per week working on investments, do it. If you don't, then dollar-cost average into index funds."

Online and app-based trading tools make it easy to buy and sell stocks, but they don't eliminate the importance of research. As Buffett advises, if you want to pick stocks, be prepared to put in the work. In other words, don't make trading decisions based on headlines or your cousin's advice. Instead, invest in companies you know and follow.

Alternatively, if you don't want the research job, spread out your risk with consistent buys into an index fund. Buffett is a proponent of dollar-cost averaging, which involves investing a set amount at regular intervals -- say, $200 monthly. Doing so reduces your risk of timing mistakes. And, if those regular buys are into a large-cap mutual fund like Vanguard S&P 500 ETF (NYSEMKT: VOO), you'll have a diversified portfolio of established, high-quality companies, too.

ALSO READ: 4 Stocks Warren Buffett Is Likely to Add to in 2021

"Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."

Buffett is a proponent of value investing, or buying into companies that appear to be undervalued by the market. This is different from growth investing, which is the pursuit of companies that are reinvesting in their operations, making acquisitions, or expanding into new markets. Growth companies can show exciting gains, but they come with the risk that those strategies won't pan out.

A good value buy is a well-run company with stable cash flow that's trading at a discount relative to its true business value. It’s on sale, so to speak. The thinking is that the market will eventually recognize that company’s value and the share price will rise accordingly.

"There is nothing wrong with a 'know nothing' investor who realizes it. The problem is when you are a 'know nothing' investor but you think you know something."

If you are a self-aware "know nothing" investor, you can make money in the stock market by regularly investing in large-cap index funds. If you are a "know nothing" investor who's not self-aware, you're likely to bet big on companies or securities you don't fully understand. Do too much of that and you're not actually investing -- you're gambling. And gambling is only fun when you're playing with money you can afford to lose.

Take an objective look at how you make investing decisions today and make sure you're operating in the right lane.

"The most important investment you can make is in yourself."

The more you know about investing, the better decisions you can make. And this doesn't necessarily mean you need to learn the ins and outs of analyzing financial statements -- although that is a useful skill to have. But if you're not a stock picker, you can benefit from learning about risk management techniques like asset allocation, dollar-cost averaging, and diversification. From there, you can study up on the various asset classes and how they behave, relative to each other and to the market in general. You might also spend some time studying history's market cycles. While past performance doesn't guarantee future results, a look back is always a good reality check.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

"It is not necessary to do extraordinary things to get extraordinary results."

Buffett, for all his success as an investor, is very clear on this point: You don't need home runs to make money in the stock market. Home runs are great, but an extended series of base hits can also make you rich over time. Don't overcomplicate your investing approach by looking for big wins. It's far easier to manage your risk when you keep things simple. You can do that by investing consistently in good companies or by riding the coattails of market returns with an S&P 500 index fund.

ALSO READ: Can You Retire a Millionaire With Index Funds?

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Some of Buffett's most interesting quips touch on the value of time in investing. In time, amazing things can happen.

For example, an oak tree takes 75 years to mature and then continues to live for several hundred years beyond that. Your investment account can function in a similar way. If you spend 30 or 40 years methodically investing and letting your wealth grow, you'll have a pot of money that can last you for decades. Specifically, a monthly contribution of $500, invested to grow at 7%, will grow to $570,000 after 30 years and to $1.2 million after 40 years. Then, if you held your withdrawals to 4% per year, you should remain solvent for 40 years or more.

Buffett did not become one of the world's wealthiest people by chance. Sure, he has a knack for choosing companies that will do well for him over time. But he's also methodical and patient in his approach, and those are qualities that can benefit any investor, from the novice to the expert.

The market will bring some surprises over the next 12 months -- it always does. You can make it through by remembering the spirit of Buffett's advice. Manage your mindset, your expectations, and your risk level. Keep advancing your own knowledge. And stay patient.

Catherine Brock owns shares of Vanguard S&P 500 ETF. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool owns shares of Vanguard S&P 500 ETF and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.