Sure, it's been a pretty brutal couple of months for ASX shares, the S&P/ASX 200 Index (ASX: XJO) and most of the stock market. Today thus far, the ASX 200 has shed a nasty 1.63% of its value. That leaves the index at under 7,000 points.
It also means that since the ASX 200 climbed back over 7,500 points in February this year, the markets have given up a horrid 7.9%.
So many investors might be watching the balances of their superannuation and brokerage accounts lose money, and wondering when the stock market will recover and make us all feel that little bit wealthier again.
That's an understandable question to ask ourselves. But it's not really the proper one right now if we want to build wealth using ASX shares. Instead, we should be asking ourselves why a market fall bothers us.
We all invest in shares to build long-term wealth. We chose the share market to do so because shares are the asset class that has traditionally delivered some of the best returns available for Australian investors. It's why most of our super funds are mostly invested in shares all of the time.
The volatility that the markets give us is merely the price of these unrivalled returns available to investors.
Thus, what is happening this year is entirely normal, even if it represents an outcome that many of us might find a little distressing right now.
What would Warren Buffett do before the stock markets recover?
So I would encourage anyone who is feeling disappointed in what the markets have given us this year so far to go back to the words of legendary investor Warren Buffett. Here's an immortal quote that Buffett said in 2001, which I think has lost none of its relevance in 2023:
To refer to a personal taste of mine, I'm going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up in price, we weep.
For most people, it's the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don't like them anymore.
The stock market is always handing us a double-edged sword. Either stocks are rising and we all feel good being a little richer on paper but are unable to buy more assets at good prices. Or stocks are falling and we all feel poorer, but we can buy more stocks for the same amount of money.
We can't have it both ways. But what is true is that the stock market will eventually recover. It's also true that stocks rise far more often than they fall. So if we want to think, and invest, like Buffett, we should all be singing hallelujah in our own households right now.
