Warren Buffett is perhaps the world's most famous investor, which makes us fortunate that he is incredibly generous with his investing advice.
One of the key messages he routinely conveys is that, while the stock market has its hard times, it has historically pulled through – always eventually realising a bull market. He's widely quoted as having once said:
Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.
So, with that, how does the multi-billionaire suggest one makes the most of the down time so to win out in the inevitably approaching bull market? Keep reading to find out.
Warren Buffett investing advice to make the most of the coming bull market
Buy companies you believe in
The first Buffett advice I'll dive into is this:
Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.
The man behind Berkshire Hathaway is a firm believer in long-term investing. He aims to hold his investments for the years and decades to come, only selling if the company grows to be an unattractive asset.
Of course, if you're not aiming to sell, it's important to only buy shares in companies you truly believe will outperform over the long term.
Look for those with competitive advantages and strong safety nets
But how can one determine if a company will outperform in the future bull market?
Well, another key piece of investing advice offered by Buffett is to buy shares with competitive advantages and wide 'moats'.
Competitive advantages can be easy to spot. They can present as a 'sticky' product (one that's hard for customers to relinquish) or a strong brand.
A moat on the other hand, relates to the durability of such advantages. A company with a wide moat might have plenty of cash tucked away in case of hard times or a low-cost production method, for instance.
Trust in your knowledge
But recognising such traits often demands a level of prior knowledge. As Buffett advises:
Never invest in a business you cannot understand.
Any company can be understood by anyone, given they put enough time into acquiring knowledge of its business model, industry, strengths, and weaknesses.
However, that time might be better spent seeking out stocks within a person's "circle of competence", as Buffett puts it.
That way, one will likely recognise an opportunity faster and, perhaps, earlier than the broader market.
And the final Buffett advice: Don't get bogged down in short-term volatility
The final piece of Buffet investing advice I'll point to is this pithy quote:
Remember that the stock market is a manic depressive.
The stock market can shoot higher one day on a seemingly insignificant tidbit and plummet the following day on another.
But other than the long term, it typically accurately weighs the value of the companies housed on it.
Shares in the best companies will likely surge when the next bull market comes, with investors who jumped on board during its approach winning out.