This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Artificial intelligence (AI) stocks have been on fire in recent years. Over the past three years alone, Nvidia (NASDAQ: NVDA) has soared by a staggering 1,180%, as of this writing. In other words, if you'd invested $1,000 in Nvidia just three years ago, you'd have nearly $13,000 by today.

However, some investors are concerned that the AI sector has become a bubble poised to burst. If that's the case, investing now could be a risky move. While nobody knows what lies ahead, here's where investors stand on the future of AI stocks. 

Should you really invest right now?

Again, the future of any stock or industry is unknowable, at least to a degree. Even the experts can't say where AI will be in six months or a year, and that uncertainty can be daunting.

That said, an investment's long-term potential is far more important than any short-term volatility. So rather than asking whether an AI bubble is looming, the real question investors should ask is where AI will be in 10 or 20 years. And according to the majority of investors, the answer is promising.

Nearly two-thirds (62%) of American adults are confident that AI-focused companies will deliver strong long-term returns, according to The Motley Fool's 2026 AI Investor Outlook Report. Among those who are already investing in AI stocks, a whopping 93% believe in the technology's long-term potential.

But what if a bubble is around the corner? Experts emphasize that the earning potential could be worth the rough patches.

"For investors willing to weather near-term volatility, the AI transformation represents a once-in-a-generation opportunity to participate in technology that's restructuring how the world works," says Donato Riccio, Head of AI at The Motley Fool.

"Of course, we'll see peaks and troughs in AI earnings cycles," Asit Sharma, AI Stock Analyst at The Motley Fool, adds, "but the long-term potential of this market is still superior to almost any other current investment theme we can name."

The key to protecting your portfolio

While you may not be able to avoid short-term volatility, investing in quality stocks is crucial to reap the long-term rewards. And there are some investments that may be better poised for significant growth over time.

Specifically, Sharma recommends seeking out companies building the foundations of AI technology.

"For the biggest opportunities, look to smaller semiconductor and data center ecosystem players, such as data interconnect specialists, high-bandwidth memory providers, and cutting-edge data storage designers," he explains. "The 'best of breed' in these categories will likely outpace the market in the next three to five years."

Wherever you choose to buy, be sure you're researching the company's fundamentals rather than relying on hype. Even weak companies can appear to thrive when the entire industry is soaring, but those stocks will struggle to bounce back after a downturn. Healthy organizations, however, are far more likely to recover from even severe volatility.

Nobody can say where AI stocks will go in 2026. We could be headed for a bubble, or the industry may have much further to climb. However, by investing in the right stocks and staying focused on the long term, you can capitalize on AI's promising growth potential while still mitigating risks. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should you really invest in AI stocks in 2026? Here's what other investors are saying appeared first on The Motley Fool Australia.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There are few names in the investing world that have as much of an impact as Warren Buffett, so when the stock market mogul speaks, it often pays to listen.

Some investors have noted that Buffett's holding company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), has been stockpiling cash in recent years. In fact, in the third quarter of 2025, the company's cash holdings reached a record high of nearly $382 billion. That figure has ballooned over the last year, leading some investors to worry that Buffett is predicting a market crash.

Should investors exit the market now? Or is it safe to keep investing? Here's what you need to know. 

Why is Buffett stockpiling cash right now?

On the surface, Berkshire's significant cash holdings may seem to suggest that the market is overvalued. Some investors may take it a step further and assume that a serious market downturn is looming. But there are many reasons why a company may hold a substantial amount in cash.

BRK.B Cash and Short Term Investments (Quarterly) data by YCharts

The market as a whole has earned record-breaking returns over the last few years, and it's not uncommon for investors to rebalance their portfolio or engage in some profit-taking by selling a portion of their shares at these high prices -- leading to greater cash holdings.

At the same time, there's a good chance that Berkshire is simply waiting for the right investment. Buffett has famously rigid standards when making investment decisions, so stockpiling cash likely has less to do with general market uncertainty and more to do with the fact that there are fewer appealing investment options available right now.

"The one problem with the investment business is that things don't come along in an orderly fashion, and they never will," Buffett noted in Berkshire's 2025 annual meeting when asked about the company's cash stockpile. "We'd spend $100 billion, and those decisions are not tough to make, if something is offered that makes sense to us and that we understand and offers good value."

What does this mean for you?

Perhaps the biggest takeaway from Buffett's investing strategy is to focus less on how the market will impact your portfolio and more on being choosy about where you buy.

There's never a wrong time to invest in the stock market as long as you're investing in the right places. If a company has solid fundamentals, offers value, and has room for growth, now can be a fantastic time to buy -- no matter what the market does in the coming weeks or months. Those stocks are always out there; it's just a matter of finding them.

This approach is more important now than ever. Many stocks may be overvalued at the moment, and sometimes, even weak companies can see their stock prices soar when the market is surging. Those investments may look appealing on paper, but if they don't have healthy foundations, they're likely to stumble hard during the next correction or bear market.

"[F]ears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now." -- Warren Buffett, The New York Times, 2008

Strong companies will very likely bounce back from whatever the market throws at them, going on to experience long-term growth. The more of these stocks you own, the less you'll need to worry about the next market downturn.

Berkshire Hathaway's enormous cash pile may be worrying to investors concerned about a stock market crash, but Buffett himself is not sounding any alarms. Rather, his timeless advice to invest only in companies that provide value and have potential for long-term growth can make it easier to navigate these uncertain times. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Warren Buffett sending a quiet warning to investors? Here's what you need to know. appeared first on The Motley Fool Australia.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As stock prices continue to sink, many investors are concerned about what that means for their portfolios.

The S&P 500 and the Nasdaq are officially in bear market territory after falling more than 20% from their peaks earlier this year, and nobody knows how long it will take for the market to recover.

Is it still worth it, then, to continue investing right now? And is it possible to make money even when we're in a bear market? It depends on your strategy.

How not to invest during a bear market

During periods of volatility, it can be tempting to try to time the market -- or buy only when prices are at their lowest and sell when they reach their peaks.  

In theory, this strategy makes sense. By investing when the market is at rock bottom, you can take advantage of those lower prices. Then when stock prices rebound, you can sell your investments for a hefty profit.

However, timing the market successfully is incredibly difficult, and it relies more on luck than skill in most cases. The stock market is unpredictable, and even the experts don't know exactly when prices will bottom out or how high they will get. If you buy or sell at the wrong moment, it could be costly.

Also, short-term investing outlooks can be riskier. Stocks that have the potential for short-term gains aren't always the healthiest investments overall, and there's a chance they may not recover from a market downturn. If you put a lot of money into short-term investments in the hopes of making a quick buck, you could lose more than you gain if those stocks fail.

A safer way to make money during periods of volatility

The good news is that it is possible to make money during a bear market, and it's easier than you might think. The key is to invest in strong companies and hold those stocks for the long term --regardless of what the market is doing.

Strong stocks from healthy companies are far more likely to recover from periods of volatility. That means no matter how far stock prices fall, you can rest easier knowing your investments have a good chance of bouncing back when the market inevitably recovers.

By holding your stocks for the long term, it also won't matter how many ups and downs the market experiences on its road to recovery. You don't need to predict how stock prices will fluctuate like you would if you were timing the market, because all that matters is that your investments see positive returns over time.

Historically, the market has seen positive long-term returns. In fact, in the last two decades alone, the S&P 500 is up more than 150%. That's despite several major downturns, including the dot-com meltdown, the Great Recession, the COVID-19 crash in 2020, and the current slump.    

^SPX data by YCharts

While nobody knows exactly how the market will perform in the coming weeks or months, we do know that over the long run, it will experience positive average returns.

There are never any guarantees when it comes to the stock market. But by investing in quality stocks and holding your investments for the long term, it's far more likely you'll generate wealth despite all of the ups and downs along the way. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Can you make money during a bear market? It depends appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This year has been tough for everyone, with stock prices plummeting and inflation making it harder to pay the bills. But many people worry that we haven't seen the worst of it and that a recession could be looming.

While the US economy shrank in the first half of the year, we're not officially in a recession just yet. The National Bureau of Economic Research is responsible for making that call and its economists have not declared a recession so far.

But that could change in 2023. Is a recession on the horizon? And what can you do to prepare? Here's what you need to know.

1. Recessions can be tough to predict

Nobody -- even the experts -- can predict exactly how the economy will perform. This is especially true when the economy is giving somewhat mixed signals.

Plummeting real estate prices, for example, could suggest that a recession is more likely. However, one key hallmark of a recession is high unemployment and with the job market stronger than ever -- and many industries still experiencing a labor shortage -- some economists are hesitant to declare a recession just yet.

Some experts believe that the Fed's interest rate policies could affect the potential of a recession. The Fed has already hiked interest rates several times this year in an effort to slow inflation, but higher interest rates are also more likely to slow the economy and lead to a recession.

The good news is that if we do face a recession, most experts believe it will be mild. In fact, around 70% of economists believe it's unlikely we'll see a sharp rise in unemployment over the next year, according to a poll from Reuters.

2. It shouldn't change your investing strategy

Stock market downturns and recessions often go hand-in-hand, and many investors are concerned about how a recession could affect their portfolios. However, regardless of what happens with the economy, it shouldn't change your investing mindset.

Investing in the stock market is a long-term strategy, and short-term ups and downs shouldn't affect your decisions. Even if stock prices continue to fall in the coming months, the best way to keep your money safe is to hold your investments until the market recovers.

Trying to time the market and sell your stocks at just the right moment is incredibly risky, and you could easily lose more than you gain. But if you simply hold your stocks for the long term, your investments should eventually rebound and you won't have lost anything.

3. There are ways to protect your portfolio -- even in a recession

Whether we ultimately experience a recession or not, there are ways to keep your money as safe as possible. Holding your investments for the long term is the best way to protect your investments, but there are a few other factors to consider, too.

• Avoid investing any money you might need in the foreseeable future: If stock prices fall sharply and then you realize you need to withdraw your savings, you could end up selling your investments at a steep loss. If you're investing for certain goals -- like saving for a house -- make sure you're prepared to leave your money in the market for at least a few years before you invest.
• Beef up your emergency fund, if you haven't done so already: If you don't have any emergency savings and you lose your job or face an unexpected expense, you could be forced to tap your investments -- and lock in those losses.
• Invest in high-quality companies: Market downturns can be a more affordable time to buy because many stocks are on sale right now. However, not all companies will be able to recover from a recession. Before you buy, do your research to ensure you're only investing in strong companies with the potential for long-term growth.

Some experts believe a recession is becoming more likely, but nobody knows for certain what will happen. By investing in strong companies and holding those stocks for the long term, though, it's far more likely you'll make it through any recession.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is a recession coming in 2023? 3 things to know appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been on a steady decline since January, and investors are feeling the pinch. The S&P 500, the Nasdaq, and the Dow Jones Industrial Average are all in bear market territory after falling more than 20% from their peaks earlier this year. That can be unnerving for even the most seasoned investors, especially when nobody knows for certain how long this downturn will last.

With the right strategy, though, you can give your investments the best chance possible at surviving a bear market. And famed investor Warren Buffett has a few tips that can make these challenging times a little easier.

1. Keep a long-term outlook

It can be tough to stay optimistic right now, as stock prices continue to drop nearly every day. But the market has seen its share of slumps and managed to recover from every one so far.

Back in 2008, Warren Buffett penned an opinion piece for The New York Times, explaining why he was continuing to invest in stocks throughout the Great Recession. In it, the Berkshire Hathaway CEO wrote that:

Fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Nobody -- even Warren Buffett -- can say for certain how the market will perform in the coming weeks or months. But over the long term, it's extremely likely to see positive average returns.

2. Take this opportunity to invest more

When stock prices are falling, throwing more money into the market may be the last thing on many investors' minds. However, continuing to invest during bear markets can be a smart way to build long-term wealth.

During a market slump, high-priced stocks are more affordable. Some companies have seen their stock prices sink by 30%, 40%, 50%, or more so far this year, which gives investors a chance to buy high-quality stocks at a steep discount.

Buffett also encourages investors to take advantage of these buying opportunities. "In short, bad news is an investor's best friend," he writes for The New York Times. "It lets you buy a slice of America's future at a marked-down price."

3. Focus on quality companies

Simply investing during a bear market is only one part of the equation. It's equally important to ensure you're investing in companies that are strong enough to recover from periods of volatility. The best stocks are the ones from healthy companies with solid underlying business fundamentals -- such as a knowledgeable leadership team and strong financials, for example.

Warren Buffett and his business partner Charlie Munger also follow this strategy when choosing investments. "[O]ur goal is to have meaningful investments in businesses with both durable economic advantages and a first-class CEO," Buffett said in a 2021 Berkshire Hathaway shareholders letter. "Charlie and I are not stock-pickers; we are business-pickers."

Investing during a bear market isn't easy, and it's not the right move for everyone. If cash is tight and you can't afford to leave your money in the market for at least a few years, it may be best to avoid investing for now.

But if you can swing it, continuing to invest in solid stocks can be a smart move. Not only can you stock up on strong investments at a discount, but you could also see substantial gains when the market inevitably recovers. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 tips from Warren Buffett to get you through any bear market appeared first on The Motley Fool Australia.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This year has been a roller coaster for the stock market, and if you're starting to feel whiplash from all the ups and downs, you're not alone.

The S&P 500 is officially in a bear market after falling more than 20% from its peak in early January. The Nasdaq is also firmly in bear territory, and the Dow Jones Industrial Average has been skirting around it for weeks.

It's normal to feel nervous about the stock market in times like these. However, history tells us one important thing about bear markets: They're not as dangerous as they may seem.

The good news about bear markets

One of the toughest parts of investing during a market downturn is that nobody -- even the experts -- knows how long it will last. That can be unnerving, especially if you have your life savings tied up in the stock market.

The good news, though, is that historically, every single bear market has eventually given way to a bull market.

Since 1928, the S&P 500 has fallen by 20% or more on 21 separate occasions (not including the current downturn). On average, that's a bear market every 4.5 years. Yet, it's not only recovered from every single one of those slumps, but it's gone on to see positive average returns over time.

^SPX data by YCharts

In other words, the stock market has seen some pretty serious bear markets and recessions over the years, but that hasn't stopped it from growing. It's extremely likely, then, that it will recover from this downturn, too.

How to make money in the stock market despite volatility

The best way to make money in the stock market is to invest consistently and hold your investments for the long term.

It's intimidating to invest during a bear market, but it can actually be a profitable strategy. When you invest during the market's low points, you're setting yourself up for significant gains when stock prices inevitably recover.

Right now is also a fantastic opportunity to scoop up quality stocks for a fraction of the price. By continuing to invest now, you'll not only reap the rewards when the market recovers, but you can also save a lot of money by investing at a steep discount.

To be clear, nobody knows exactly how long it will take for the market to recover. For that reason, it's best to avoid investing any money you might need in the foreseeable future. But if you can afford to invest right now, it could be a profitable move.

The key to keeping your money safe

One of the most important aspects of investing during a downturn is choosing the right stocks. Even the strongest companies may see their stock prices fall during a market slump, but as long as they have solid underlying business fundamentals, they're more likely to bounce back when the market recovers.

Weaker companies, though, may have a harder time rebounding. By doing your research and only investing in solid long-term stocks, your portfolio will have a much better chance of surviving even the worst downturns.

When in doubt, you may opt to invest in an S&P 500 tracking fund, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). An S&P 500 ETF includes the same stocks as the index itself, and because the S&P 500 is almost guaranteed to recover from downturns, this type of investment will, too.

Market downturns aren't easy to stomach, and it's normal to feel nervous about investing during periods of volatility.

However, right now can be a fantastic opportunity to generate wealth. By investing in the right places and holding those investments for the long term, you can protect your savings while maximizing your earnings at the same time.    

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Nervous about investing? Here's what history tells us about bear markets appeared first on The Motley Fool Australia.

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Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Vanguard S&P 500 ETF. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It's been a rough year so far for the stock market and the past few weeks have been especially shaky.

After a brief bear market rally, the S&P 500 has fallen more than 7% since mid-August. The tech-heavy Nasdaq is also down more than 10% in that time frame and many investors are concerned that this could be the beginning of a market crash.

There is a chance that stock prices could continue falling, and we may be headed toward a more significant downturn. But the good news is that it doesn't necessarily matter whether the market crashes. Here's why.

What history shows about market crashes

Nobody can predict exactly how the market will perform in the short term. Stock prices can be erratic, and even the experts can't say for certain what will happen in the coming weeks or months.

What we do know, though, is that over the long term, the market is incredibly consistent. And if history shows us anything, it's that there is good reason to be optimistic about the market's future.

Since 1980 alone, the S&P 500 has fallen by at least 10% on 20 separate occasions. Some of those crashes were severe, too. During the Great Recession [2007-2008], for instance, the S&P 500 lost nearly 57% of its value at its lowest point. In the dot-com bubble burst in the early 2000s, it fell by close to 50%.

However, the S&P 500 has also earned returns of nearly 3,600% in that same time frame. Despite all this volatility, the stock market has an incredible track record of recovering from even the worst crashes.

^SPX data by YCharts

This isn't to say that market crashes aren't nerve-wracking. Nobody wants to see their portfolio plummet in value, and these downturns can be difficult to stomach even for the most experienced investors.

Over time, though, the market is much safer than it may seem. Even if a crash is looming, by sticking it out and staying invested, you can take advantage of those long-term gains.

The secret to making money in the stock market

While it can be intimidating, one of the best ways to maximize your earnings is to continue investing during downturns.

Again, stock market crashes aren't easy. But they are one of the best opportunities to buy. Stock prices are significantly lower during a downturn, which means you can load up on solid investments at a fraction of the cost.

Then, when the market inevitably rebounds, you'll reap the rewards. Case in point: Between 2009 and 2010 during the recovery phase of the Great Recession, the S&P 500 saw returns of close to 70%. If you had invested during the lowest point of that downturn, you likely would have seen substantial gains in a relatively short time.

It's uncertain whether a market crash is looming, but the future isn't as grim as it may seem. By continuing to invest and keeping a long-term outlook, it's possible to make a lot of money in the stock market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Will the stock market crash? It doesn't matter as much as you might think appeared first on The Motley Fool Australia.

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 The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Stock prices have taken a tumble again, ending the bear market rally that investors have seen over the last month. Currently, the S&P 500 is down more than 18% from its peak in early January, and some investors worry the market still has further to fall.

To be clear, nobody -- not even the experts -- knows what exactly to expect over the coming months. The stock market can be unpredictable, so it's tough to say whether stock prices will continue falling or how severe that drop might be if they do.

All that uncertainty can be daunting, and that's normal. But just how worried about the stock market should you be? And should you still invest right now? Here's what you need to know.

What will happen with the stock market?

Again, nobody knows for certain how stocks will perform in the near term. However, the market itself has a long history of rebounding from downturns and going on to see positive average returns over time.

In other words, no matter what happens in the coming weeks or months, the market will recover eventually. The best you can do, then, is try to keep a long-term outlook and avoid getting caught up in the market's daily fluctuations.

This doesn't necessarily mean you shouldn't stay informed about market news. But try your best to avoid letting your emotions guide your decisions. Downturns can be nerve-wracking, but the market has experienced dozens of crashes, corrections, recessions, and bear markets over the years. And it's recovered from every single one of them.

^SPX data by YCharts.

Keep in mind, too, that as long as you stay invested, you're unlikely to lose money. If you pull your money out of the market after stock prices have fallen, you'll lock in those losses. But if you simply hold your investments until the market inevitably recovers, you can make it through unscathed.

Is now a good time to buy stocks?

It's often challenging to invest when the stock market is shaky, but it can actually help you make more money over time.

When the market is in a slump, stock prices are lower. While that may not seem like a positive thing, it means you can load up on high-quality stocks for a fraction of the price. Some stocks are down 40%, 50%, 60%, or more from their peaks, making right now a fantastic time to invest at a discount.

Once the market eventually recovers, most stocks should increase in value once again. When that happens, you could potentially see significant gains.

The key is to ensure you're choosing the right investments. Not all stocks can recover from a downturn, but strong companies are the most likely to pull through. By filling your portfolio with healthy companies and holding those stocks for the long term, it's much more likely your investments will survive whatever may happen with the stock market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should you be worried about investing in the stock market right now? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In some ways, things are starting to look up for the U.S. economy. A promising inflation report and low unemployment have many people feeling optimistic that perhaps the worst of this downturn is over.

However, many Americans are still feeling the pinch, and a potential recession is still on the table. To be clear, we're not officially in a recession just yet. The National Bureau of Economic Research, the organization responsible for making that decision, hasn't made the official call so far.

Whether or not we'll face a recession later this year is uncertain. But if there's anyone who knows how to survive economic downturns, it's famed investor Warren Buffett. Here's his advice for getting through a recession.

1. Keep a long-term outlook

Nobody knows for certain whether a recession is looming or how long it might last if it hits. But we do know that, over the long run, the economy and the stock market will recover.

Short-term volatility is normal, and there is a possibility that the economy could slow and stock prices might sink over the next few months. If that happens, your investments could lose value in the near term. However, even the worst recessions are only temporary, and things will get better over time.

Back in 2008, at the height of the Great Recession, Warren Buffett wrote an opinion piece for The New York Times. He explained that amid the recession, "businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records five, 10, and 20 years from now."

2. Invest more

It can be daunting to continue investing when the future is uncertain, but right now is one of the best opportunities to buy more.

While the market has been rebounding in recent weeks, stock prices, in general, are still well below their peaks from earlier this year. That means you have the chance to load up on quality stocks at a discount -- which can potentially save you a lot of money over time.

This strategy can also be incredibly profitable. When you invest during economic slumps, you're setting yourself up for significant returns when the market recovers. For example, in March 2009, the S&P 500 hit its low point during the Great Recession. But in the following year alone, it saw returns of nearly 70%.

^SPX data by YCharts.

According to Buffett, an important rule to remember when investing is to "be fearful when others are greedy, and be greedy when others are fearful." If we face a full-blown recession and stock prices fall further, that is your opportunity to "be greedy" and invest as much as you can afford.

3. Focus on quality investments

The best way to ensure your investments survive a recession is to fill your portfolio with strong, long-term stocks. Not all businesses will make it through tough economic times, but healthy companies have the best chance of experiencing consistent growth despite volatility.

This is especially important to remember when stock prices are lower. It can be tempting sometimes to buy shaky stocks simply because they're on sale. But a bad investment is still a bad investment even if it's affordable. You're better off sticking to quality stocks that are more likely to rebound from slumps. As Buffett says, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

Nobody can say exactly how the market or the economy will perform over the coming months, and there's still a chance that we could face an official recession. No matter what happens, though, the right strategy (and the right investments) can keep your money as safe as possible.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 tips for surviving a recession, according to Warren Buffett appeared first on The Motley Fool Australia.

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Motley Fool contributor Cat Lindsay has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been rebounding in recent weeks, with the S&P 500 up more than 11% over the past month.

While there are countless factors affecting stock market performance, at least part of the reason for this surge could be the positive inflation report from the Bureau of Labor Statistics. According to the report, inflation slowed in July, giving some investors hope that it's reached its peak.

But whether this bear market is truly over is unclear right now. So is it really safe to invest? Or should you hold off? Here's what you need to know.

When is the best time to invest in the stock market?

The positive trajectory of the market over the last few weeks has been promising, but there are no guarantees that it will continue. The stock market can be unpredictable, and even the experts can't predict exactly how it will perform.

The good news, though, is that there isn't necessarily a bad time to invest. While it may be tempting to only invest when the market is thriving, that can be expensive because you're only buying when stock prices are at their highest. By investing during downturns, too, you can snag quality stocks at a discount.

This strategy is known as dollar-cost averaging, and it involves investing consistently throughout the year no matter what the market is doing.

Sometimes, you'll end up buying when prices are at their peaks. Other times, you'll be investing when the market is at rock bottom. Over time, though, those highs and lows should average out. Not only does this take the guesswork out of when to invest, but it's also cheaper than only investing when prices are high.

Is it safe to invest right now?

Because there's not necessarily a wrong time to invest, now could be the perfect opportunity to buy stocks. The market has not made a full rebound just yet, so many stocks are still priced at a discount.

The most important thing to keep in mind is that investing is a long-term strategy. If the market falls again, your portfolio could lose value -- and that's OK. Short-term ups and downs are normal, and over time, the market has historically seen positive average returns.

It can be challenging to avoid getting caught up in the market's daily fluctuations, but a long-term outlook can make this volatility easier to stomach. For example, while the S&P 500 is currently down around 10% since the beginning of the year, it's up more than 200% over the past 10 years.

By staying focused on the long run, these small daily movements won't matter as much. Even if the market falls again, it will rebound eventually.

Keeping your money safe

One of the most effective ways to keep your portfolio safe during periods of economic uncertainty is to choose the right investments.

Even shaky stocks can sometimes thrive when the market is surging and the economy is strong, but only the strongest companies will survive downturns. The businesses with the healthiest underlying fundamentals are the most likely to pull through tough times, and the more of these stocks you have in your portfolio, the better.

Again, nobody knows for certain how the market will perform in the coming weeks or months. But when you have a portfolio full of healthy stocks, it's far more likely your investments will bounce back from whatever may happen.

It's not easy to invest when the market is turbulent, but it's also not as risky as it might seem. By choosing the right stocks and holding them for the long term, you can rest easier knowing your money is as protected as possible.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Just how safe is the stock market right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Katie Brockman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As crypto prices sink to new lows, it can be a daunting time to invest. Nobody knows for certain when the market will bottom out or how long it might take to recover, and there are no guarantees that crypto will recover at all.

That said, now is also one of the best times to invest. Prices are lower than they've been in months, making it one of the most affordable opportunities to buy. Also, if prices eventually rebound, you could stand to make a lot of money by investing now.

Choosing the right investments, though, is key. While there are never any guarantees that any cryptocurrency will succeed over time, there's one that I'm stocking up on right now: Ethereum (CRYPTO: ETH).  

Could Ethereum be a lucrative investment?

Ethereum's biggest strength is its blockchain network and its ability to host decentralized applications (dApps). These dApps range from non-fungible token (NFT) marketplaces to decentralized finance (DeFi) projects to metaverse applications.

If any of these areas see growth over time, Ethereum will benefit from it. Also, because Ethereum is the most popular network for dApps, it has the most potential for growth if NFTs, DeFi, or the metaverse succeed.

Currently, Ethereum is the second most popular cryptocurrency behind Bitcoin, with a market cap of around $135 billion. For context, Solana and Cardano -- two of Ethereum's biggest competitors -- have market caps of roughly $12 billion and $14 billion, respectively. 

Where Ethereum falls short

Although Ethereum is the biggest and strongest decentralized network, it has its flaws, too -- primarily when it comes to its speed.

Right now, Ethereum can handle only around 14 transactions per second. Not only does that limit the number of transactions on the network, but it also creates extremely high transaction costs for users. As a result, many users and developers have flocked to smaller, faster networks like Solana.

The good news is that Ethereum developers are working on an update to solve this problem. This upgrade will move Ethereum from a proof of work (PoW) protocol to a proof of stake (PoS) system, which could help the network reach speeds of up to 100,000 transactions per second.

When, exactly, that update will be completed is unclear. So far, the rollout has been plagued by delays. The latest phase of the update, called "The Merge," should happen sometime in 2022, and the final phase is planned for 2023 or 2024.

While Ethereum's upgrade is a positive move for the network, anything could happen between now and when it's completed. Newer cryptocurrencies are being developed by the day, and there's a lot of time for competitors to gain traction in the market.

Is Ethereum a good investment?

Despite its imperfections, Ethereum is one of the stronger cryptocurrencies out there. It's also heavily discounted right now, with its price down roughly 77% from its peak in November. If you've been waiting for a chance to invest, now could be your opportunity.

Before you buy, though, consider your tolerance for risk. There are no guarantees that Ethereum (or any cryptocurrency) will thrive over time, so there's always a chance you could lose your investment. Be sure, then, that you're only investing money you can comfortably afford to lose.

While nobody knows what the future holds for crypto, Ethereum may have what it takes to stick around for the long haul. If you're willing to take on more risk for the chance of seeing potentially lucrative returns, it could be the right investment for you. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post No contest: My top crypto to buy now appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia owns and has recommended Bitcoin, Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has officially entered bear market territory, and cryptocurrency prices are also continuing to sink. 

The good news, though, is that expensive investments are now much more affordable. The price of Solana (CRYPTO: SOL), for example, is down roughly 86% from its peak. If you've been on the fence about investing in crypto, prices are lower than they've been in a long time.

Solana may have been knocked down in recent months, but there are plenty of reasons why it's a strong investment -- and could even be the next Bitcoin (CRYPTO: BTC).  

Where Solana shines

Solana was one of the breakout stars of the crypto world in 2021, and it's also one of the fastest-growing cryptocurrencies. Although its biggest competitor is Ethereum (CRYPTO: ETH), Solana's most recent developments are helping it compete with Bitcoin, too.

Until recently, Solana was primarily known for its ability to host decentralized applications. Like Ethereum, it's a programmable blockchain that is home to everything from non-fungible token (NFT) marketplaces to decentralized finance (DeFi) projects and more.

Its lightning-fast speed and low transaction fees have helped it grow quickly. Many developers and users, frustrated with Ethereum's sluggish transaction times and high fees, have flocked to Solana over the past year.

How Solana is competing with Bitcoin

Recently, Solana announced the release of Solana Pay, a decentralized payment system that allows merchants to accept cryptocurrency as a form of payment.

Solana Pay could give Bitcoin a run for its money, as both are helping to usher in crypto as a form of payment. Solana Pay, however, does have some distinct advantages over Bitcoin.

For one, Solana Pay has very little impact on the environment, according to Solana developers. This is an area where Bitcoin has been heavily scrutinized, as the crypto giant uses more energy than some entire countries. Critics of Bitcoin have also pointed out that because it's so energy-intensive, it could be difficult for it to scale.

Also, Solana Pay transactions happen instantly and cost just a fraction of a penny. Bitcoin transactions, on the other hand, can take anywhere from 10 minutes to an hour to finalize, and fees are generally around $1 to $2 per transaction (though they can be much higher).

Is Solana the right investment for you?

Solana has plenty of strengths, but it's not the right option for everyone. Like all cryptocurrencies, it's still speculative at the moment, meaning nobody knows whether it will succeed over time or not.

Also, although Solana has certain advantages over both Ethereum and Bitcoin, it's still an underdog. Bitcoin is the most popular cryptocurrency in the world, with a market cap of roughly $394 billion. Ethereum is the most widely used blockchain for decentralized applications, and its market cap is around $132 billion. Solana, by comparison, has a market cap of just $10 billion.

Solana has also struggled with its network's reliability, having experienced several major outages in 2022 alone -- which has likely contributed to its sinking price. While developers are working to strengthen the network and fix these issues, many investors are understandably hesitant about its future.

In order to truly compete with Bitcoin and Ethereum, Solana will need to work through these growing pains and continue gaining new users. It's uncertain whether that will happen, though, which does make Solana a higher-risk investment.

If you're willing to take on more risk for the chance of earning potentially lucrative returns, Solana may be the right fit for you. Just be sure you're only investing money you can comfortably afford to lose, and double-check that the rest of your portfolio is properly diversified to limit your risk.

Solana isn't a good fit for everyone, but it has its advantages. Whether it will ever overtake Bitcoin is unclear, but it's already proven to be a strong player in the crypto world. By weighing the pros and cons and considering your tolerance for risk, it will be easier to decide whether it's the right investment for you. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Solana the next Bitcoin? appeared first on The Motley Fool Australia.

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Katie Brockman has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia owns and has recommended Bitcoin, Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.  

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Investing in the stock market can be challenging, and nobody has all the right answers. Also, because investing is a long-term strategy, sometimes you won't see the repercussions of mistakes until it's too late.

If I could go back in time, there are several things I'd change about my own investing journey. Here's how you can avoid making the same mistakes I did.

1. I waited too long to start investing

When I first started saving money, I put everything I had in a savings account. That's not necessarily a bad idea because a savings account is often the best place for an emergency fund and other short-term savings. 

However, I continued contributing to a savings account well after I had an established emergency fund because I thought it was safer than investing. In reality, I missed out on valuable time to let my money grow.

Over the long term, keeping your money in a savings account can be costly. Even the best accounts only have interest rates of around 1% to 2% per year, which isn't even enough to keep up with inflation -- so your money could actually lose value over time. 

By investing in the stock market, though, you can earn average returns of around 7% to 10% per year over time. Although it can be daunting, investing your money rather than simply saving it can help you earn exponentially more over the long run.

2. I made withdrawals from my retirement account

When I eventually did start investing, I still treated my retirement fund like a savings account. I assumed that since it was my money, I could withdraw it at any time for any reason. I also figured that since I won't need my retirement savings for decades, withdrawing a little here or there wouldn't make a difference.

However, there are drawbacks to making early retirement fund withdrawals. For one, if you take money from a 401(k) or traditional IRA before age 59 1/2, you could face taxes and penalties on your withdrawals.

Also, even small withdrawals can affect your long-term savings. Compound interest is the driving force helping your money grow, and it essentially involves earning interest on your entire account balance rather than just your initial investment. The higher your balance, then, the more you'll earn in compound interest and the faster your money will grow.

When you make withdrawals, though, it's harder for compound interest to do its job. Repeated withdrawals over time can have a more significant effect, potentially costing you thousands of dollars in missed earnings.

3. I worried too much about the market

When I first began investing, I would obsessively check my account balance every day to see how much my savings had grown. But whenever my balance went down even slightly as a result of normal market fluctuations, I would panic and stop investing.

By now, though, I've learned that market volatility is normal and day-to-day fluctuations don't really matter. What does matter is the market's long-term performance. 

To this day, I rarely check my account balance -- especially when the market is in a slump. I've set up automatic contributions so that a set amount of money is transferred from my bank to my retirement account each month, and I don't even think about how my investments are performing on a day-to-day basis.

Investing in the stock market is a long-term strategy and over time, the market has consistently earned positive average returns. By staying focused on the future, it can be easier to avoid getting hung up on the market's short-term volatility.

Investing isn't always easy, but it's also one of the best ways to generate long-term wealth. While nobody has all the answers, a good strategy can help you earn as much as possible over time. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 of my biggest investing regrets — and How you can avoid them appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Becoming a millionaire can seem like a goal that's only attainable for a select few. However, it's possible to become a millionaire by investing in the stock market -- even if you're not already wealthy.

The right strategy is key, though, to reaching millionaire status. While not everyone will be able to accumulate $1 million or more in the stock market, there are a few investing moves that will give you a better chance of achieving that target.

1. Start investing as early as possible

Time is your most valuable resource when it comes to generating wealth in the stock market. The more time your money has to grow, the more you will accumulate over time -- and the less you'll need to invest each month to get there.

Regardless of your age or how much you can afford to invest, it's wise to get started now. It's never too early to begin investing and waiting just a few years could make it more challenging for your money to grow. Even if you can't afford to invest much, investing a little now is better than putting it off.

2. Invest consistently

Whether you're investing $200 per month or $2,000 per month, consistency can help your money go further.

When you invest a set amount on a consistent basis, you're taking advantage of a strategy called dollar-cost averaging. The stock market is constantly fluctuating. When you invest a certain amount on a set schedule throughout the year, sometimes you'll be buying when prices are high, and other times when prices are lower.

Over time, those highs and lows should average out. If you were to invest a large amount of money once or twice a year, you could risk only buying when prices are high. Similarly, if you stop investing when the market is in a slump, you'll miss out on the opportunity to buy when prices are lower.

3. Stick to long-term investments

The investments you choose can make a significant impact on how much your money will grow. Invest too aggressively and you could risk losing more than you gain. Invest too conservatively, though, and you could have a tough time reaching $1 million.

While everyone's portfolios will be slightly different depending on personal preferences, it's wise to keep a long-term outlook when choosing investments.

Long-term investments may not experience explosive growth, but they are more likely to see positive average returns over decades. This slow-but-steady approach is safer than buying high-risk, high-reward stocks, and it can make you more likely to achieve $1 million in the stock market.

When choosing long-term investments, keep an eye on the stock's underlying fundamentals. Is the company in a strong place financially? What does its leadership team look like? How has it handled market downturns in the past? Questions like these can help you choose solid investments that are more likely to grow over time.

Reaching millionaire status isn't always easy, but it is possible. With the right strategy -- and the right investments -- you'll be on your way to a million-dollar portfolio.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 investing moves that could make you a millionaire appeared first on The Motley Fool Australia.

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The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The stock market has been rocky lately, and that volatility can be concerning to investors. Coupled with the economic uncertainty we're facing right now (including surging inflation and potential interest rate hikes this year), some investors worry a crash is looming.

To be clear, it's impossible to say for sure whether a market crash is coming or not, as even the experts can't predict exactly how the market will perform in the short term.

While nobody knows for sure what's in store for the stock market, there are a couple of reasons you shouldn't worry about a potential crash -- as well as two instances when a downturn could be cause for concern.

Why you shouldn't worry about a crash

1. The market will eventually rebound

Market crashes can be intimidating. Regardless of how long you've been investing, it's nerve-wracking watching your portfolio sink in value.

The most important thing to remember during times like these, though, is that the market as a whole has a very long history of recovering from downturns. In fact, since 1928, the S&P 500 has fallen by more than 20% on 21 separate occasions. And each and every time, it eventually bounced back.

Of course, it can sometimes take months or years for the market to fully recover from a crash. But historically, it has always managed to rebound stronger than ever.

2. Timing the market is nearly impossible

In theory, the best investing strategy would be to pull your money out of the market right before prices fall, then reinvest when they're at rock bottom. This is called timing the market, and it's a strategy some short-term investors use to make a quick profit.

However, this tactic is nearly impossible to pull off successfully. Because the market is unpredictable, no one can say exactly when it will crash or when prices will bottom out. In many cases, the market will dip only to rebound a day or two later.

If you sell and prices quickly recover, you'll miss out on those potential gains. Similarly, if you wait too long to sell and prices have already fallen substantially, you may end up selling at a loss.

A safer bet, then, is to simply hold your investments regardless of what the market is doing. If prices drop, try your best to wait it out until they eventually recover.

When a potential crash could be concerning

1. You're investing too much money

Although market downturns are normal (and an inevitable part of the market's journey), there are some instances where a dip could potentially hurt your finances.

It is possible to invest too much money in the stock market, especially if you're investing cash you can't afford to lose.

When the market takes a turn for the worse, stock prices may fall significantly. This makes downturns a particularly bad time to sell your investments. If all your cash is tied up in stocks and the market crashes, you could be in a tight place financially if you incur an unexpected expense.

For that reason, it's wise to double-check that you have an emergency fund stocked with at least six months' worth of savings. Not only will this protect your finances in the short term, but it will also make it easier to keep your money in the market -- thus helping your investments grow more over the long run.

2. You're not investing in the right places

The stock market itself has a long history of recovering from downturns, but that doesn't necessarily mean that all individual stocks will be able to bounce back, too. Low-quality stocks may not be strong enough to weather severe volatility, and if you have a lot of these investments in your portfolio, your savings could be at risk.

Before a downturn hits, examine each investment in your portfolio and ask yourself whether its fundamentals are strong enough to survive volatility.

Of course, nobody can predict exactly how a stock will perform, but the healthiest investments have solid financials, a competent leadership team, and a competitive edge in their industry. With strengths like these, a company has a better chance of recovering from a market downturn.

Market dips can be daunting, regardless of whether you're a new or longtime investor. By taking steps to prepare and maintaining a long-term outlook, however, your portfolio is more likely to thrive no matter what happens. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 reasons you shouldn't worry about a stock market crash — and 2 reasons you should appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Cryptocurrency has been having a rough year so far. Major cryptocurrencies have watched their prices plummet over the past two months, and the crypto market as a whole has shed nearly $1 trillion since its peak in mid-November.

While falling prices can be concerning, it's also a fantastic opportunity to "buy the dip." Expensive cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are essentially on sale right now.

Bitcoin is currently priced at $43,000 per token, down from nearly $70,000 in November. Similarly, Ethereum costs around $3,300 per token, a steep fall from its peak of close to $4,900 per token a couple of months ago.

If you've been considering buying crypto, right now is one of the most affordable times to invest. But does that mean it's a smart investment? Here's what you need to know.

Is crypto a good investment right now?

In general, it can be smart to load up on stocks during market downturns. Stocks tend to be more affordable when the market is down, but there's a good chance prices will rebound once the market recovers.

Cryptocurrency is a little different, however, because it's still highly speculative.

Stocks have a long history of growth over time. As long as you do your research and choose the right investments, it's likely your stocks will recover from downturns and earn positive average returns over time.

With crypto, though, there's no guarantee it will succeed over the long run. Although major cryptocurrencies are developing more utility, most of their growth is still based on their potential real-world uses. In other words, while there's a chance crypto could explode and change society as we know it, there's also a chance it could fail. And right now, nobody knows what will happen.

Should you invest in cryptocurrency?

Crypto isn't necessarily a bad investment. It is risky, though, so be sure you know what you're getting into before you buy.

To decide whether crypto is right for you, consider your tolerance for risk. The price of Bitcoin has fallen by nearly 37% since mid-November, and it's lost more than 80% of its value in the past. If you know that level of volatility will cause you to lose sleep at night, crypto may not be the right investment for you.

It's also important to think about your overall financial situation before you invest. As with any investment, it's best to keep a long-term outlook. Be prepared to keep your money invested for at least a few years, if not decades. Also, don't invest any money you can't afford to lose, and double-check that the rest of your portfolio is well-diversified.

Finally, try your best to keep realistic expectations when investing in crypto. There's no shortage of stories about people who have made millions investing in cryptocurrency, but those instances are the exception rather than the rule.

While you likely won't become a millionaire overnight, it is possible to make money with crypto. It is a risky investment, though, so don't rush to buy simply because it's more affordable right now. If you have a higher tolerance for volatility and can afford to invest, now might be the right opportunity to buy. Otherwise, you may be better off waiting. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Crypto is crashing: Should you invest now? appeared first on The Motley Fool Australia.

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Katie Brockman owns Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool Australia Katie Brockman owns Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It's been a rough couple of months for Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

After reaching record highs in November, both cryptocurrencies have been on a downhill slide. Bitcoin is down more than 36% since its peak, and Ethereum has fallen by nearly 30% since its all-time high.

There are several factors that could be fueling this recent sell-off, including news that the Federal Reserve could raise interest rates in coming months, as well as the recent internet shutdown in Kazakhstan -- a key country for Bitcoin mining.

While this drastic drop may be concerning, keep in mind that in some cases, price dips are a smart opportunity to invest more affordably.

Bitcoin and Ethereum are the two most expensive cryptocurrencies, priced at around $41,700 per token and $3,200 per token, respectively. But compared to their all-time high prices of close to $70,000 and $4,900 per token, these cryptocurrencies are essentially on clearance right now.

Does that mean you should stock up on Bitcoin and Ethereum while they're on sale? Not necessarily. Here's what you need to know.

Are Bitcoin and Ethereum good investments?

When prices fall during a market downturn, it can be tempting to load up on investments simply because they're more affordable. But before you buy, it's important to make sure they're the right investments for you.

Like all cryptocurrencies, Bitcoin and Ethereum are still speculative -- meaning nobody knows for certain how they will perform over the long run. That said, both have strong advantages that could help them succeed over time.

Bitcoin, for example, is designed to be a store of value and an inflation hedge. While the jury is still out when it comes to how effective Bitcoin is at hedging against inflation, as inflation continues to soar, more investors are looking to Bitcoin as a long-term investment. It's also continuing to gain traction as a form of payment, even becoming legal tender in El Salvador.

Ethereum is also poised for further growth in 2022 as it transitions to its Ethereum 2.0 upgrade, which will make the network faster, more energy-efficient, and more affordable to use. This update will not only make it easier for Ethereum to scale, but it will also help it keep up with younger competitors like Cardano and Solana.

Should you invest right now?

Whether you invest in Bitcoin or Ethereum depends largely on your tolerance for risk. Although this recent slump may seem alarming, it's not the worst these cryptocurrencies have seen over the years. Bitcoin, for instance, has lost more than 80% of its value in the past, and throughout 2018, Ethereum's price plummeted by close to 95%.

Volatility like this has become the norm for crypto. While there's a good chance Bitcoin and Ethereum will survive this downturn, be prepared for more turbulence if you choose to invest. If you're a risk-averse investor, consider whether you're comfortable with this level of volatility.

Keep in mind, too, that if you invest, it's best to hold your investments for as long as possible. In other words, don't expect to buy now and then sell in a few weeks for a quick profit. Only invest if you plan to hold your investments for at least a few years, if not decades.

Like all investments, Bitcoin and Ethereum have their strengths and weaknesses, and they're not right for everyone. If you can tolerate higher levels of risk and are willing to hold your investments for the long term despite volatility, they may be a good fit for you. Otherwise, you may be better off waiting for now. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Bitcoin and Ethereum are crashing: Is now the time to invest? appeared first on The Motley Fool Australia.

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Katie Brockman owns Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What are meme coins?

What's the difference between cryptocurrency and meme coins?

Should you invest in meme coins?

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post What are meme coins, and can they make you rich? appeared first on The Motley Fool Australia.

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Katie Brockman owns shares of Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Cryptocurrency is the latest phenomenon in the investing world, but how safe is it really? While some people have made millions buying cryptocurrency, you could easily lose everything.

Even the experts are divided about whether crypto is a good investment or not. Some celebrity billionaires like Elon Musk have promoted cryptocurrencies like Bitcoin (CRYPTO: BTC) and Dogecoin (CRYPTO: DOGE) on social media, while other investors like Charlie Munger and Warren Buffett have famously voiced their criticism of cryptocurrency.

Cryptocurrency can be incredibly risky -- so risky that some would consider it more of a gamble than an investment. And there are a few things you should know before you buy.

1. Investments are long-term, while gambling is short-term

The truth is, cryptocurrency could be either an investment or a gamble, depending on your strategy.

If you're buying crypto for the sole purpose of trying to get rich overnight, then it falls into gambling territory. But if you truly believe cryptocurrency is the way of the future and will be around for decades to come, then buying it now could be considered more of an investment.

No matter where you choose to invest, it's best to take a long-term strategic approach. Don't invest in anything you're not willing to hold for at least a few years, or ideally decades. Cryptocurrency is extremely volatile in the short term, but if you believe in its future, you could stand to make a lot of money over time if it succeeds.

There are no guarantees that cryptocurrency will succeed over the long run, and you could still lose everything even when taking a long-term approach. But you're less likely to lose money than if you were to try to time the market to make a quick buck in the short term.

2. Investing is taking calculated risks

Investing will always carry some degree of risk, even if you're investing in relatively safe places. But becoming a successful investor involves taking calculated and educated risks, and the same is true when it comes to cryptocurrency.

If you put your life savings behind cryptocurrency, that's definitely a gamble. But there are ways to invest in cryptocurrency in a more calculated and safer way.

First, make sure your financial situation is healthy and you're only investing money you can afford to lose. Next, double-check that your portfolio is properly diversified. If you're adding crypto to the mix, you'll want to be sure the rest of your investments are as strong and stable as possible. Then if crypto does fail, it won't take the rest of your portfolio down with it.

By being strategic and careful about how you invest in cryptocurrency, it's possible to reduce your risk.

3. Where you invest matters

Cryptocurrency, in general, is risky. But some cryptocurrencies are more dangerous than others, and choosing the wrong one could be a gamble.

While cryptocurrencies may be very different from stocks, you can still research them in much the same way you would other investments. With stocks, it's important to look at a company's underlying fundamentals to determine whether it's likely to grow over time. The same is true for cryptocurrencies.

As you're researching different types of cryptocurrencies, ask yourself a few questions. Does this particular cryptocurrency have any real-world utility right now? If not, how likely is it to become mainstream in the future? Does it have any advantages over its competitors? If new cryptocurrencies come along, how likely is it that this one will retain its advantages?

If you're choosing cryptocurrencies based on how trendy they are or how much their price has increased, that's more similar to gambling. But if you do your research and are buying the cryptocurrency you believe is the strongest, then it's more of an investment.

Should you invest in cryptocurrency?

Right now, cryptocurrency is still a highly speculative investment, and nobody knows where it will go. Unlike stocks, cryptocurrencies don't have a long track record. And no matter how much you try to reduce your risk, there's still a good chance you could lose money. If you're a risk-averse investor, it may be best to steer clear of cryptocurrency for now.

But if you've decided you want to invest in crypto, the best thing you can do is research your options, prepare your portfolio accordingly, and hold onto your investment for the long term. You can't eliminate risk entirely, but the more you prepare, the better off you'll be.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is cryptocurrency investing or gambling? 3 things you need to know appeared first on The Motley Fool Australia.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Cryptocurrency is the latest phenomenon in the investing world, even with the beating it has taken over the past few weeks. Many cryptocurrencies have seen their prices plummet, and Dogecoin (CRYPTO: DOGE) is no exception.

The price of Dogecoin is down more than 40% since its peak in mid-May. However, it's still up by more than 12,600% over the past 12 months, making it one of the fastest-growing cryptocurrencies. By comparison, Bitcoin (CRYPTO: BTC) is up around 250% over the past year, and Ether (CRYPTO: ETH) has increased by close to 1,000% in the same time frame.

Because Dogecoin has experienced such explosive growth, it might seem like a smart investment. If the cryptocurrency continues surging at this rate, you could stand to make a lot of money by investing now. 

Dogecoin isn't the right investment for everyone, though, and it can be downright dangerous. So before you buy, make sure you've answered these three important questions.

1. Are you investing for the right reasons?

Getting rich in the stock market is certainly possible, but it's not easy. If you're investing solely for the purpose of trying to become a millionaire overnight, you'll likely end up disappointed (and potentially broke).

No matter where you choose to invest, you should only be buying investments that you believe will succeed over the long term.

Dogecoin has grown significantly over the short term, but that growth may or may not be sustainable. If you choose to invest, it should be because you believe in its potential and think it will be around for the long haul -- not because you're hoping to make a quick buck.

Whether Dogecoin has any staying power is uncertain right now. Its fundamentals might not be as strong as those of larger cryptocurrencies like Bitcoin and Ether, but its supporters still believe it can continue growing. Before you invest in Dogecoin, make sure you're willing to hold on to it for the long term.

2. Can you afford to lose your investment?

All investments are subject to some degree of volatility, but cryptocurrency is especially turbulent. And of all the cryptocurrencies, Dogecoin is one of the riskier options. This means that if you choose to buy, don't invest any money you can't afford to lose.

Right now, Dogecoin lacks real-world utility. The vast majority of merchants don't accept it as a form of payment, and without widespread adoption, it will be challenging for it to become a mainstream form of currency. In addition, there are other cryptocurrencies that have lower transaction fees and use less energy, meaning that Dogecoin doesn't have much of a competitive advantage in the industry.

In addition, its skyrocketing price has more to do with online investors pumping up its price than its fundamentals. Dogecoin has been going down a route similar to companies like GameStop and AMC Entertainment Holdings, where short-term investors inflate the stock price only to sell soon after and make a profit.

For those reasons, Dogecoin is a high-risk option. That doesn't mean it's impossible to make money with it, but be sure you're prepared to potentially lose whatever you invest.

3. Have you considered all your options?

Dogecoin is one of the most well-known cryptocurrencies, but it's not your only choice. If you only invest in Dogecoin because it's trendy, you could end up missing out on a better alternative.

There are countless types of cryptocurrency, but two of the biggest names in the industry are Bitcoin and Ether. Bitcoin is the most popular cryptocurrency, and it's also the one most widely accepted by merchants. Because it has the longest track record and the most name recognition, if any cryptocurrency were to succeed over the long term, it could be Bitcoin.

Ether is the second-most-popular cryptocurrency. The terms "Ether" and "Ethereum" are often used interchangeably, but technically speaking, Ether is the cryptocurrency itself while Ethereum is the blockchain technology behind it. Ethereum is one of the biggest names in blockchain, and it has a variety of uses outside of cryptocurrency. This gives Ether an advantage because it has a better chance of succeeding if Ethereum succeeds.

Dogecoin could become a real competitor in the cryptocurrency space if it continues to improve and gain supporters. But before you invest, it's important to do your research and make sure it's the best option for you.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Dogecoin: 3 questions to tell whether it's time to invest appeared first on The Motley Fool Australia.

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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.