When it comes to a stock market crash, the best thing to do might be to do nothing. At least for a while anyway.
If you haven’t already heard and been keeping your eye on things, the stock market has recently the largest drop it has had in around a decade. For any investor, a drop in the stock market is a scary and daunting time, They can also be extremely predictable.
While there is no way to predict when the market may take a nosedive, an investor is well aware that markets ebb and flow. They sometimes do that dramatically, even more so when unexpected events occur. However, a stock market crash like the latest is bad news if you need your money sooner rather than later.
This is the main reasons that you shouldn’t buy stocks with the money you are likely to need in the next few years. For investors who are in it for the long haul, a stock market crash like this shouldn’t be a big issue.
So? What’s ahead?
For a long-term investor, the best thing you can do when the market crashes is absolutely nothing. Just take a deep breathe and turn away from the news, try not to continuously log in to your accounts and view your account balances.
You should try to resist the urge to sell any stocks shares, this is the worst thing you could do after a market crash. The most successful investors buy low and sell high if you sell when it’s low you are doing the exact opposite of your aim.
Some investors come into the common mistake of thinking they should withdraw their investment when a crash happens and reinvest when it’s better but there is no true way to know when it may swing back. And if it ever will. This means that it could be better to leave it well alone and give it time to settle before making any decisions.
If you were planning on buying stocks anyway, continue to act as normal and buy, the best time to invest is when you have the money to do so, and you should withdraw when you ‘need’ it for something else. If you have been waiting to buy, however, a market crash isn’t an opportunity to but low and see a great return, a market crash could mean that things aren’t going to get better any time soon, and there is no way of knowing what will and what won’t.
If anything you should be taking this time to rebalance your portfolio, especially when things have started to calm down. Although this volatile time may make the value of your stocks shift you away from your overall target, but remember with an investment there is no rush and this sort of thing happening may give you the right push to give your whole portfolio a check over. Using tools like Myfxbook can help you to monitor area that you need to.
Although a stock market crash can be unnerving, it’s not the sign of an imminent financial collapse, and it definitely doesn’t mean that stocks are no longer a decent long-term investment.
How are you dealing with the current issues? Do you have any tips you could share?
PS Hope this was informational ?!
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