Is Warren Buffett Right About the Stock Market? Here's What Investors Should Know.

Actions speak louder than words

That's why investors have much to glean from Warren Buffett's moves, even though he hasn't ly spelled out what he's thinking the stock market these days

If you combine his actions with his general advice in the stock market, you can get a good idea what you should be doing with your money in today's market

Selling and saving It's easy to see how Buffett is apaching the market today

Berkshire Hathaway has also built up its cash reserves to its highest-ever levels, and that continues to rise to new highs

Image source: The Motley Fool

At the annual holder meeting in May, Buffett effectively said that he just doesn't see the right opportunities to spend the money, adding, "We'd spend $100 billion

I mean, those decisions are not tough to make, when something is offered that makes sense to us and that we understand and offers good value, and where we don't worry losing. " He explained that his team is "very, very, very opportunistic," and that opportunities don't come up "in an orderly fashion. " Buffett is in the of waiting for the right opportunities, not trading for the sake of trading. "If you told me I had to invest $50 billion every year until we got down to $50 billion, that would be the dumbest thing in the world to invest in that manner," he said

That's a pretty assessment of why he's holding cash right now

It's his job to be strategic buying and selling, but Buffett also said he can understand an investor who will make a few good investments and hold on to them forever

That could be the right decision for many investors who don't have Buffett's day job

Pools and pizza Does that mean there aren't great opportunities out there

Although Buffett has sold more than he's bought, he has still identified new stocks to buy

Some recent purchases include Pool Corp

That might be surprising to many investors since these aren't the kinds of stocks that elicit a lot of hype

I'd wager many investors never heard of Pool Corp

Before Buffett bought it

But it isn't surprising to Buffett ers who understand his philosophy

He loves to buy pieces of great es, which means they have some kind of moat, excellent management, and don't need to use a lot of money to make a lot of money

There are many ways to have a moat, but he's described his favorite companies as having a global brand name that travels

Domino's easily falls into that, as the largest global pizza chain

Has more of a niche than Domino's, but it's also a global leader

If you're looking for great stocks, you can find great candidates that fit your criteria even now

You might want to hold on to some cash and wait for opportunities, but you also need to be in the market to benefit from its long-term ascent

If you're already in the market, you need to stay in the market and let your money compound over time, even through volatility

That's why it's important to have an emergency fund

You should also make sure you're well-diversified, with several long-term, Buffett-type winners that can shield your portfolio in challenging times

Jennifer Saibil has no position in any of the stocks mentioned

The Motley Fool has positions in and recommends Berkshire Hathaway and Domino's Pizza

The Motley Fool has a disclosure policy.