Recent market volatility may have been hard to take for investors. However, it is at times like these that you and your investment portfolio can really prosper.
For decades, legendary investor Warren Buffett has taken advantage of market weakness to buy shares at attractive prices.
And when you look at the Oracle of Omaha's track record over the last 50+ years, it is hard to argue against following his lead and doing the same.
According to the most recent Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) letter to shareholders, Buffett has overseen a return of 19.8% per annum since 1965.
To put that into context, a modest $100 invested at the start of Buffett's investment journey with Berkshire Hathaway would now be worth in the region of $3.5 million. There's arguably no greater demonstration of compounding than this. If only we had a time machine!
Follow Buffett's lead when buying ASX shares
It is worth noting that Buffett doesn't necessarily look to buy any old share just because it looks cheap. Rather, he looks for opportunities to buy high-quality shares at levels that he believes are less than they are worth.
After all, just buying a high-quality ASX share, preferably with a sustainable competitive advantage and positive long-term growth outlook, at a slight discount could potentially provide infinitely better returns for investors than buying a dirt-cheap share with no moat and limited growth prospects.
Buffett summarises this with the following quote:
It's far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.
Overall, unless you have an impending need to withdraw your capital from the share market, I would suggest that you look at market volatility as an opportunity rather than something unpleasant. Just like Buffett has done for decades.
