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3 Reasons Not to Worry About a Stock Market Crash | Personal Finance

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It’s simply hard to avoid market declines; they happen a lot. If you let them worry you, you’ll be worried all the time.

2. They can be welcome events, delivering bargains

Another reason not to worry about a stock market crash is because it can create great bargains. Some of the most successful investors have made some of their best investments right after a market crash because lots of great companies’ stocks are suddenly trading at much lower prices. If you’re worried about any particular companies you own stock in or would like to own stock in, it’s helpful during or after a crash to take a deep breath and ask yourself: Has anything changed for the worse regarding this company’s future? Most likely, the answer will be no — the stock has simply fallen along with the rest of the market. The business remains intact and operating as well as before.

If you can keep some cash on hand, you might even be able to make the most of a stock market crash by snapping up shares you’ve been wanting to own. Think back to 2008, for example, when the stock market plunged. Shares of Microsoft fell more than 30%, but since the end of 2008 they have risen more than 1,400%.

3. Recoveries are often quick

A final reason not to panic over market corrections and crashes is that they tend to be over relatively quickly. As the Schwab report noted, “Since 1974, the S&P 500 has risen an average of more than 8% one month after a market correction bottom and more than 24% one year later.” So if you’re planning on buying into certain stocks after a crash, don’t procrastinate.

Read More: 3 Reasons Not to Worry About a Stock Market Crash | Personal Finance

2021-10-17 17:50:00

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