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With trade tensions rising, sweeping tariffs looming and recession fears rattling Wall Street, stocks have been on a wild ride. Watching a portfolio sink into the red can be nerve-wracking, but investing legend Warren Buffett has long warned against reacting emotionally when markets take a dive.

“Some people should not own stocks at all because they just get too upset with price fluctuations,” Buffett told CNBC’s Becky Quick. “If you’re going to do dumb things because a stock goes down, you shouldn’t own a stock at all.”

Quick pressed him: “What are dumb things? Selling a stock because it goes down?”

Buffett didn’t hesitate: “Yeah, selling a stock because it goes down. I mean, you know, if you buy your house at $20,000 and somebody comes along the next day and says, ‘I’ll pay you $15,000,’ you don’t sell it because the quote’s $15,000. You look at the house or whatever it may be. But some people are not actually emotionally or psychologically fit to own stocks.”

Buffett’s message rings especially true in today’s economic climate. With markets whipsawed by tariff uncertainty and broader economic jitters, knee-jerk reactions could turn temporary losses into permanent ones. Instead of treating stocks like lottery tickets, Buffett urges investors to think like business owners — focusing on long-term value rather than short-term noise.

After all, as he famously said during the 2008 financial crisis, “A simple rule dictates my buying: be fearful when others are greedy, and be greedy when others are fearful.”

And while not all assets are created equal, Buffett has shared a surprisingly simple way to tell which ones are worth owning — and which ones aren’t.

In a 2018 interview with Yahoo Finance, Buffett explained that there are two types of things people buy: one qualifies as a real investment — the other, not so much.

The test to tell the difference is simple: if trading were banned for a period of time, would the asset still hold up?

“If you buy something — a farm, an apartment house or an interest in a business — and look to the asset itself to determine whether you’ve done something, what the farm produces, what the business earns, and so on, you don’t really care whether the stock market’s open,” Buffett said. “You look at the investment itself to deliver the return to you.”

Simply put, the kinds of assets Buffett sees as real investments produce returns on their own. They don’t need an open market — or a future buyer — to be worthwhile.

Buffett has often pointed to real estate — especially rental properties — as a textbook example of a productive, income-generating investment.

In 2022, Buffett remarked that if you offered him “1% of all the apartment houses in the country” for $25 billion, he would “write you a check.”

Why? Because regardless of what’s happening in the broader economy, people still need a place to live and apartments can consistently produce rent money.

The best part? You don’t need to be a billionaire investor to tap into that income stream.

For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.

With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.

With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.

Another option is First National Realty Partners (FNRP), which allows accredited investors to diversify their portfolio through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord.

With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to Triple Net (NNN) leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.

Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.

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Buffett says that when you buy an “interest in a business” and focus on what the business earns — rather than daily market moves — “you don’t really care whether the stock market’s open.” And it’s no surprise he feels that way.

His company, Berkshire Hathaway, has delivered staggering returns over the decades — through bull and bear markets — by owning stakes in high-quality, cash-generating businesses.

But of course, not all businesses are created equal — so how do you pick the right ones?

Buffett’s solution is refreshingly simple: own an S&P 500 index fund. These funds offer broad exposure to the S&P 500 — the top companies listed on U.S. stock exchanges.

Such a straightforward approach gives investors instant diversification without the need for constant monitoring or active trading.

“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett famously stated.

The beauty of this approach is its accessibility — anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time with tools like Acorns, a popular app that automatically invests your spare change.

Signing up for Acorns takes just minutes: link your cards and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio. With Acorns, you can invest in an S&P 500 ETF with as little as $5 — and, if you sign up today, Acorns will add a $20 bonus to help you begin your investment journey.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.