If a Stock Market Crash Is Coming, You'll Want to Hold Onto These 3 Warren Buffett Stocks

Ask Warren Buffett if a stock market crash is imminent, and he'll almost certainly tell you that he doesn't know. The legendary investor has repeatedly stated through the years that he doesn't try to predict what the market will do over the near term.

However, you can tell when Buffett is concerned about market dynamics. For example, he recently said that many investors are "gambling." He also warned in the past that when the ratio of total stock market capitalization to GDP approaches 200%, investors are "playing with fire." That metric, known popularly as the Buffett indicator, now stands at 237% -- an all-time high.

If a stock market crash is indeed coming, you only have to look to Buffett's Berkshire Hathaway (NYSE:BRKA) (NYSE:BRKB) portfolio for ideas on how to weather the storm. Here are three Buffett stocks you'll want to hold onto if the market is in for a rough ride.

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1. The Coca-Cola Company

Buffett has owned shares of The Coca-Cola Company (NYSE:KO) longer than any other stock in Berkshire Hathaway's portfolio. He has owned a stake in Coca-Cola for 38 years. The beverage giant ranks as Berkshire's third-largest holding.

Think about what has happened over the last 38 years. The dot-com bubble burst, causing the stock market to tank. The financial crisis of 2008 led to another steep market crash. The COVID-19 pandemic literally shut down much of the world. And people around the world kept drinking Coca-Cola's products through all these challenges.

To be sure, Coca-Cola's stock can experience downturns. But it's steadier than most stocks, as evidenced by its super-low 5-year beta of 0.34 -- which means Coke's shares are significantly less volatile than the S&P 500 (SNPINDEX:^GSPC).

Buffett also loves Coca-Cola's dividends. The company is a member of the Dividend Kings, an elite group of companies that have increased their dividends for at least 50 consecutive years. Coca-Cola's streak of dividend hikes currently stands at 64 years and counting.

2. American Express

American Express (NYSE:AXP) ranks as Berkshire Hathaway's second-longest-held position. Buffett initiated a position in the financial services leader in 1991 and has held onto the stock ever since. Amex is also Berkshire's second-largest holding, trailing only Apple (NASDAQ:AAPL).

Like Coca-Cola, American Express is resilient because of its underlying business model. The company targets relatively affluent cardholders who have historically maintained their spending even during recessions.

American Express' beta of 1.05 shows that it has been slightly more volatile than the S&P 500 over the last five years. However, the stock's higher volatility is actually a positive: Amex stock has nearly doubled during the period and has handily beaten the overall market.

In his 2023 letter to Berkshire shareholders, Buffett wrote about American Express: "When you find a truly wonderful business, stick with it." He added that Amex was one of a select few stocks that he expected Berkshire would "maintain indefinitely."

3. Chevron

Unlike Coca-Cola and American Express, Chevron (NYSE:CVX) isn't one of Buffett's longest-held positions. Berkshire added Chevron to its portfolio in late 2020, when oil stocks were still down sharply due to the COVID-19 pandemic.

But Buffett knew that buying Chevron would pay off over the long term. And he was right. The stock is up almost 140% since the end of 2020. It has also outperformed the broader market this year, thanks in part to the Iran war pushing oil prices higher.

If the stock market crashes in the near future, higher inflation driven by soaring oil prices could be a leading catalyst. However, Chevron would likely flourish in such an environment.

Even if oil prices decline, Chevron is well-positioned to continue rewarding investors with its juicy dividends. The company believes that it can fully fund its dividend program and planned capital projects with Brent crude below $50 per barrel. Brent is currently around $88 per barrel.

American Express is an advertising partner of Motley Fool Money. Keith Speights has positions in Apple, Berkshire Hathaway, and Chevron. The Motley Fool has positions in and recommends American Express, Apple, Berkshire Hathaway, and Chevron. The Motley Fool has a disclosure policy.