Want to make a million in the next market crash? I’d use these 3 Warren Buffett tips today

first_img See all posts by Peter Stephens I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Peter Stephens | Friday, 18th December, 2020 “This Stock Could Be Like Buying Amazon in 1997” Image source: The Motley Fool Warren Buffett has previously invested money following a market crash to great effect. It has enabled him to buy high-quality companies at prices that undervalue their future prospects.His strategy works because he is content to hold large amounts of cash ready to invest in a market decline. He also takes a long-term view of his investments, and seeks to buy businesses with wide economic moats.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Clearly, the timing of the next market crash is a known unknown. However, planning for it now could be a means of improving an investor’s prospects of making a million.Warren Buffett’s willingness to hold cashWarren Buffett holds a significantly greater proportion of cash within his portfolio than is the case for many other investors. Yes, this means lower returns when stock markets are rising. But it also gives him the opportunity to capitalise on low valuations when they come along. And with a market crash often being of short duration, access to large amounts of liquidity can help an investor to take advantage of temporarily cheap stock prices.With interest rates currently low, holding a substantial amount of cash may reduce an investor’s overall returns in the short run. However, the low valuations often available in a market decline may mean it is worth accepting a lower return in the short run. It could offer greater scope for capital appreciation over the long term.A patient stance regarding the prospect of a market crashWarren Buffett also takes a patient approach when managing his portfolio. This means he is unconcerned about when a market crash will happen, or how long it will take for the stock market to recover. As a result, he is content to wait for the best opportunities to come along. Should there be none at a particular point in time, he is happy to wait. One day, shares in high-quality companies will trade at lower prices.Looking ahead, it is unclear when the next market crash will occur. However, the past performance of the stock market suggests a downturn is always set to take place in the long run. Waiting for it in order to buy high-quality stocks at cheap prices could be a profitable long-term move.Seeking economic moatsWarren Buffett has previously purchased companies with wide economic moats. This means a competitive advantage over their peers that can lead to higher profits in a variety of market conditions. Through purchasing businesses with advantages such as strong customer loyalty and a unique product, it may be possible to generate relatively high returns in the next market crash.Even if an investor matches the stock market’s long-term return of around 8% per year, a £100,000 investment today would be worth over a million within 30 years. However, by holding cash for better opportunities, having a patient approach and buying stocks with wide economic moats, it may be possible to obtain a higher return over the long run. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Want to make a million in the next market crash? I’d use these 3 Warren Buffett tips today I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. Enter Your Email Addresslast_img read more