Warren Buffett isn't buying but says one stock market bet still makes sense

• Berkshire Hathaway Chairman and CEO Warren Buffett has long said that owning an S&P 500 stock market index fund is the best bet long-term investors can make.
• Even as Covid-19 makes the billionaire concerned about stocks, including the airlines he sold, as well as the extreme nature of Fed policy needed, Buffett still believes in holding the S&P 500.

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In 1987, Berkshire Hathaway Chairman and CEO Warren Buffett laid out his stock market strategy in a famous way: "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." 

In 2008, Buffett penned an op-ed in the New York Times where he indicated that Berkshire was putting that strategy into action as the financial crisis worsened: "In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary. ... I've been buying American stocks."

But the Covid-19 pandemic has left the Oracle of Omaha uncertain about the near-term future. 

Berkshire Hathaway's annual shareholder meeting, dubbed the Woodstock for Capitalists, was forced to go virtual this year. And despite Berkshire Hathaway's record cash pile, Buffett says he has not been on a buying spree, because there hasn't been anything "that attractive."

Berkshire sold its entire stake in airline stocks, and while Buffett praised Federal Reserve Chairman Jay Powell, he remains concerned about the extreme nature of the Fed policy needed to get through this crisis. 

Still, there is one stock market bet that Buffett did not waver on this weekend. He believes that the average investor should buy a broad stock market index fund for a long period of time instead of following the advice of stock pickers. 

"In my view, for most people, the best thing to do is owning the S&P 500 index fund," Buffett said at Berkshire's annual meeting. "If you bet on America and sustain that position for decades, you'd do far better than buying Treasury securities, or far better than following people  ... Perhaps with a bias, I don't believe anyone knows what the market is going to do tomorrow, next week, next month, next year," Buffett said.

But in the long run, "nothing can basically stop America," he told Berkshire shareholders.

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