3 Things You Shouldn't Do If the Stock Market Crashes
The S&P 500 and Nasdaq Composite have both fallen into a bear market, with each of these broad indexes down at least 20%. Geopolitical tensions are high, inflation is raging, and a recession seems likely. If there's one thing you have to avoid right now, it is panicking. Here are three things you shouldn't do during this, or any, market crash.
If you've taken the time to create a portfolio of stocks with strong long-term prospects, then a bear market is a terrible time to sell them. The key thing to remember is that the market, and individual stocks, tend to move along a sine curve. Essentially, good times are followed by bad times, and bad times are followed by good times. If you let yourself get caught up in either the upswing or the downswing, you increase the chances of jumping in and out of the market at the worst possible times.
In other words, you'll increase the chances you buy high and sell low. The goal is to keep buying great companies and holding them so you benefit from the long-term growth of the businesses. If you do that and avoid indiscriminate selling during bear markets, you should come out of market downturns just fine. It may take a while, but history suggests that good companies eventually reward investors well.
Source Fool.com
