Few investors have navigated more market cycles than billionaire investor Warren Buffett. And right now, his decades of wisdom feel more relevant than ever.
Both the FTSE 100 and the S&P 500 are trading near all-time highs, despite a world suffering geopolitical uncertainty, from ongoing Middle East conflict to trade tensions and slowing economic growth. It’s making plenty of investors nervous. And honestly, that’s understandable.
But panic-selling or sitting on the sidelines indefinitely isn’t the answer. So what is?
What does Buffett actually recommend?
The ‘Oracle of Omaha’ has been remarkably consistent on this point over the decades. His advice? Stop trying to time the market and start focusing on the quality of the businesses you own.
To quote Buffett: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
In other words, record highs shouldn’t change your strategy. What matters is whether the underlying business has a durable competitive advantage, reliable earnings growth, and the kind of staying power that lets compounding do the heavy lifting over time.
The second piece of advice is just as simple: stay invested. Buffett has long warned that missing even a handful of the market’s best days can devastate long-term returns, and those days are almost impossible to predict.
Buffett’s real-life proof
The clearest example of Buffett walking this walk is his purchase of Coca-Cola (NYSE:KO) in 1988.
At the time, markets were still rattled from the 1987 Black Monday crash. Sentiment was fragile, and many investors were sitting on the sidelines. Buffett did the opposite. He bought aggressively, acquiring roughly 6.2% of the company.
Today, Berkshire Hathaway is earning a dividend yield on cost of around 63% from that single position! That’s the power of buying quality and doing nothing.
But does the same logic apply to Coca-Cola today?
Is Coca-Cola still worth buying in May 2026?
Today, Coca-Cola operates in almost every country in the world, generating enormous free cash flow, while raising its dividend for over 60 consecutive years. That makes it one of the most historically reliable income compounders on the planet.
However, the business isn’t without its challenges. The company generates the vast majority of its revenue from sugary drinks at a time when consumer health consciousness is accelerating globally. Even governments are stepping in by introducing sugar taxes and tighter advertising restrictions, which could weigh on volumes over the long run.
There’s also the question of currency exposure. A significant portion of Coca-Cola’s earnings is generated in many emerging market currencies. A strengthening US dollar (which has historically followed periods of global uncertainty) can meaningfully erode reported profits, even when the underlying business is performing well.
For income-focused investors seeking stability, I think Coca-Cola still merits consideration. It won’t make you rich overnight. But then again, that’s precisely the point Buffett’s always made.
The key question now is whether management can navigate shifting consumer tastes and currency headwinds without denting that remarkable dividend growth streak. Personally, I think the answer’s ‘yes’.
