Warren Buffett Warns Investors May Be "Gambling" Right Now. Should You Sell Your Stocks?

The S&P 500 (SNPINDEX: ^GSPC) continues to reach new heights, earning total returns of nearly 88% over the past three years alone, as of this writing.

What goes up must come down eventually, however. Nearly 42% of U.S. investors believe stock prices could sink in the next six months, according to a survey from the American Association of Individual Investors published in late May, while only 36% remain bullish about the future.

It's impossible to say exactly what's coming for the market, but Warren Buffett recently offered a serious warning for investors.

Image source: The Motley Fool.

When investing becomes gambling

In a May 2026 interview with CNBC during Berkshire Hathaway's annual meeting, Buffett noted that many investors are getting too comfortable with risky investments.

"I've compared the markets to a church with a casino attached," he explained. "[T]he casino has gotten very attractive to people. If you're buying one-day options, or selling them... that's not investing, it's not speculating, it's gambling."

He went on to add that, while not all investing is gambling, investors should exercise caution when buying amid soaring valuations.

"[W]e've never had people in a more gambling mood than now," he said. "But that doesn't mean that investing is terrible. It does mean that prices for an awful lot of things will look very silly."

Should you sell your stocks right now?

Selling your stocks and avoiding the market may seem safer right now, especially if you're worried that stock prices are about to plunge. However, sometimes that can be costly.

Nobody can say how the market will fare in the short term, and sometimes, stocks can continue to thrive despite all of the warning signs. In the past year alone, we've faced everything from skyrocketing oil prices to high inflation to tariffs, along with plenty of other factors that could have rattled the market.

Despite everything, though, the S&P 500 is up by around 30% in that time. If you had sold your stocks at the first sign of turbulence, you could have missed out on potentially lucrative gains.

^SPX data by YCharts

That said, it is an incredibly expensive time to invest right now, so it's more important than ever to choose your stocks wisely. If you buy into a company that's already significantly overvalued, that stock could have much further to fall during the next correction -- whenever that may happen.

In the event of a particularly severe bear market or recession, some stocks may not recover at all. Companies with shaky foundations may not have what it takes to survive tough economic times, making these stocks especially risky buys.

The market is historically pricey right now, but that doesn't mean it's a bad time to buy. The key is to invest in quality stocks and hold them for at least a few years. With enough time, you can ride out any stock market storms while also building long-term wealth.

Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.