As the world grapples with the coronavirus outbreak, legendary investor Warren Buffett warns that fear is still an investor’s biggest obstacle.

“Fear is the most contagious disease you can imagine," the chairman and CEO of Berkshire Hathaway (BRK-A, BRK-B) said during Berkshire Hathaway’s annual shareholder meeting. "It makes the virus look like a piker.” (A piker is “one who gambles or speculates with small amounts of money.”)

While commending the Federal Reserve for acting quickly in response to the pandemic, Buffett said that he was confident about the future of the American economy in terms of stocks.

[See also: Warren Buffett: ‘Never, ever bet against America’]

“It all depends on your circumstances, but you shouldn’t buy stocks unless you expect… to hold them for a very extended period of time and are prepared financially and psychologically to hold them,” Buffett explained. “The same way you would hold a farm and never look at a quote and never pay.”

Day-to-day stock movements shouldn’t concern an investor, the Berkshire Hathaway CEO stressed, adding: “You’ve got to be in the right psychological position. And frankly, some people are not really careful. Some people are more subject to fear than others.”

And fear is a little like the virus. “It strikes some people with a much greater ferocity than others,” Buffett said.

But at the end of the day, “fear is something I never felt financially,” he explained. “Some people can handle it psychologically. If you can’t handle it psychologically, then you shouldn’t own stocks because you’re going to buy and sell them at the wrong time.”

‘The American magic has always prevailed’

At the same time, due to the economic fallout from the coronavirus, “we have businesses that we own directly that are going to be hurt significantly,” Buffett noted. “The virus will cost us money.”

He expects the economic fallout to continue into the near future.

“I don’t know the consequences of shutting down the American economy,” Buffett said. “I know eventually it will work, whatever we do. But what we do know is … it could go on.”

Nevertheless, Buffett was optimistic over the longer term.

“Put it this way, five years from now, I think Berkshire will be employing considerably more people,” he stated. “We faced tougher problems… the American miracle, the American magic has always prevailed, and it will do so again.”

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Aarthi is a reporter for Yahoo Finance covering consumer finance and higher education. Follow her on Twitter @aarthiswami.

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