Fear Is Driving the Stock Market Right Now. Warren Buffett Has 6 Encouraging Words for Moments Like This.

The stock market has been on red alert this week, as the 10-Year Treasury yield surpassed the critical 5% threshold -- its highest level since 2007, just ahead of the onset of the Great Recession.

Major market indexes are feeling the heat, too. The S&P 500 (SNPINDEX: ^GSPC), Dow Jones Industrial Average (DJINDICES: ^DJI), and Nasdaq Composite (NASDAQINDEX: ^IXIC) have all stumbled over the last month, and between record-high oil prices, stubborn inflation, and AI doomsday woes, stocks have their work cut out for them.

Fortunately, despite all of the stomach-churning headlines lately, investors can always count on Warren Buffett to deliver some reassuring news.

Image source: The Motley Fool.

The smartest investors are taking advantage of this moment

Fear is a normal and valid reaction to moments like this, and if you're unnerved by recent market events, you're not alone.

The Fear and Greed Index measures investor sentiment on a scale from 0 to 100 based on a variety of market indicators. Higher numbers indicate "greed," or general confidence in the market, while lower figures suggest more fearful sentiment. Over the last month, this index has swiftly plunged from 64 to 31, as of this writing.

According to Warren Buffett, however, moments like these are opportunities of a lifetime. One of Buffett's most popular adages is to "be greedy when others are fearful." He reiterated that sentiment in a 2008 opinion piece for The New York Times to help reassure beaten-down investors during the Great Recession.

"To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions," he emphasized. "But 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 five, 10, and 20 years from now."

^SPX data by YCharts

Buffett's prediction came true, and the S&P 500 has soared by over 1,000% since that article was published. In other words, if you'd invested $10,000 in an S&P 500 ETF in October 2008 and didn't contribute another dollar, you'd have nearly $113,000 by today.

The best stocks to buy right now, according to history

As Buffett noted, stocks in weak competitive positions will likely struggle to pull through economic rough patches. The higher the market climbs, the more likely it is that some stocks are overvalued and will underperform over time.

But companies with a durable competitive advantage, well-managed finances, a proven leadership team, and other indicators of strong fundamentals are most likely to succeed over time. These are hands-down the best stocks to buy right now.

The market is no stranger to volatility, as the S&P 500 has experienced nearly two dozen bear markets over the last century. It's not only recovered from every single one, but it's also helped investors build life-changing wealth. The best way to capture that wealth is to invest in quality stocks and hold them for decades.

Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.