Panic-Selling During a Bear Market Comes With a Hefty Price Tag
Following a bull market from mid-2020 through the end of 2021, the stock market has had a humbling 2022, with many great companies and major indexes dropping well into the double-digit percentage range. It's easy to get your emotions involved whenever you're dealing with money, especially when you're seeing your portfolio's value dwindle daily. During bear markets and downturns in the market, investors may begin panicking and selling investments to avoid the value dropping even further, but this is the wrong approach to take.
One of the best lessons investors can learn is that down periods are as much a part of the stock market as stocks themselves. If you're focusing on the long term, however, short-term price movements shouldn't discourage you or make you lose sight of your financial goals.
Nobody likes losing money -- that defeats the purpose of investing. However, it's important to understand that losses in your portfolio are unrealized. These unrealized losses don't become permanent losses until you decide to sell your shares. If you believe in the long-term potential of your investments, though, there's no need to sell them and lose money because you panicked watching prices drop.
Source Fool.com
