Rising emotions and smart investment choices are not a tasty combination. If you are new to investing or have never experienced a stock market dip before, a suddenly falling stock market can be quite scary. For some investors, emotions then run so high that they make choices that are precisely not in their favor. To save you those, you can read in this blog what is good to consider when the stock market dips.
Do not sell at a loss
It may sound crazy, but you don’t really make a loss until you sell your investments at a loss. A common mistake investors make is: sell their investments when the stock market dips. In fear of losing their investment. If you bet on one horse and the company goes down, that may be wise. But if you are investing spread, it is best to just wait a while and do nothing. Because if you look at history, then
the stock price has so far
always recovered.
Insert regularly
No one knows exactly what the stock market will do. Not even the most experienced investors. But if you invest regularly and diversify your investments, you can be sure of at least one thing: that you will buy stocks both when they are cheap and when they are expensive. And since – as mentioned earlier – prices have always risen so far, your pot will then grow in the long run. Therefore, it is actually best to do what you always do, regardless of what stock prices do.
Experienced investors often even try to profit from a falling stock market or crash. By investing extra during falling stock market, they can buy back the depreciating shares at relatively favorable prices. Once the stock market then recovers, they will be the laughing third parties as their purchased shares rebound in value.
Stay calm
Fear is a poor counsellor. Do you see that stock prices are falling? Then try to control your emotions and stay calm. This is not the first stock market dip, nor will it be the last. A bad period in the stock market is part of it. Indeed, without peaks and valleys, the stock market would not even exist. The game of supply and demand is precisely the mechanism of the stock market.
Ignore the news
You’re already worried about your stocks, and all the news reports surrounding the stock market crash don’t make it any better. Maybe you check cash on your phone to see how big your loss is now again. Chances are that this will only make you feel more miserable, and that will ultimately get you nowhere. If you are investing for the long term, there is also no need to be on top of the news. Think about what you are putting money aside for, take a leisurely walk around the block and persevere.
Focus on the long term
When the stock market dips and also when things are going great, it is important to keep the long term in mind. You never know in advance whether it will be a good or bad stock market year. It is especially relevant where you stand over a longer period of time. So far, the stock market has always risen in the long term. And just when the stock market is doing worse, it makes sense to stick to that and only concern yourself with the dot on the horizon.
