Should You Invest in the Stock Market in 2026? Here's Warren Buffett's Best Advice.

Warren Buffett officially retired from his long-standing role as CEO of Berkshire Hathaway at the end of 2025, but his investing advice is more relevant than ever.

As we head into the new year, many investors are wondering where the market will go in 2026. Some are concerned that an AI bubble burst is on the horizon, while others are optimistic that the bull market will continue throughout the year.

Even Warren Buffett can't predict what will happen to stocks in the short term, but he can offer some timeless advice to investors wondering whether right now is really the right time to buy.

Image source: The Motley Fool.

Is it time to be fearful or greedy?

One of Buffett's most famous pieces of advice is to "be fearful when others are greedy, and be greedy when others are fearful." With stock prices at record highs, some investors interpret this phrase to mean that it's time to press pause on buying for now. However, the situation is a bit more nuanced.

It is an incredibly expensive time to invest in the stock market, and plenty of stocks are overvalued right now. In those situations, it may be time to "be fearful." That said, there are loads of undervalued companies poised for significant growth, too.

For that reason, there's really no one-size-fits-all answer as to whether you should invest right now, because it depends on where you're investing.

If you can find undervalued stocks that are still flying under the radar, you could see robust returns in the coming years. But if you're only investing in the most hyped stocks simply because they're popular, you risk buying at inflated prices only to face steep drawdowns during the next correction.

Where should you buy right now?

Where you choose to invest will depend on your individual preferences, portfolio goals, and risk tolerance. But if you're looking for a low-maintenance investment to capture undervalued segments of the market, a value ETF could be a smart choice.

Value ETFs aim to provide exposure to a selection of stocks that are undervalued compared to the broader market. These funds focus on stocks from strong companies with solid fundamentals, often with reliable dividend income.

Compared to high-flying growth stocks, value stocks often aren't flashy. But they can be powerful long-term investments, especially during bear markets.

What if a crash or recession is coming?

It may be tempting to sit out of the market altogether right now, especially if you're a risk-averse investor concerned that more volatility is around the corner. But even if we face a nasty downturn in 2026, continuing to invest consistently can help maximize your returns over time.

"Over the long term, the stock market news will be good," Buffett explained in a 2008 opinion piece for The New York Times. "In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

"You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain," said Buffett. "But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy."

If the headlines are making you queasy, that's OK. The best antidote to that is to invest in quality stocks and hold them for the long term. No matter what the near term holds, strong investments are incredibly likely to experience positive total returns over time.

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.