What to do When the Market Falls?
“Paisa doob gaya!!”
It’s safe to assume this to be our common reaction to a falling market right?
You’ve surely felt one or more of these feelings when the market has fallen: panic, fear, anxiety, anger, sadness, or desperation.
What if we tell you that the falling of the market can potentially make no difference to you?
What if we tell you that despite the falling market, you can still make profits?
No, you don’t need to be pinched, because you aren’t dreaming.
Here are the reasons why you may not need to panic when the market falls:
#1 ‘What comes down, must go up’
Historically, for every time that the market has fallen, it has (obviously) gotten back up too.
The market falling is usually because of an incident or news, or when the market corrects itself.
While there is no denying that this can have an effect on traders, for the long-term investors, it is not a sign of concern at all.
Here’s what we mean.
Had you invested your money in 2009, it would have had its ups and downs multiple times over the next 10 odd years.
But being a part of this community, we know wealth is a long-term game.
Over the next 10 years, your investment would only increase, because, over the long run, the stock market always goes up (just like the prices of phones named after fruits).
#2 ‘Wrong place at the wrong time’
Do you know how in life, some things just happen in the wrong place at the wrong time?
That’s what happens when panic sets in during a falling market.
After the market falls, panic makes you sell the stock you own in the attempt to save yourself from losing more, and you decide to sit out of the market until that vicious bear has left the market.
That’s where things go wrong. What ends up happening is that we sell stocks at a price lower than we bought them when the market crashes and then we miss the upturns and try buying it again when the prices have increased. The opposite of what we should be doing. WE end up in the wrong place at the wrong time. Want to be at the right place at the right time?
Just wait it out. Nobody likes when markets fall, but considering it being inevitable, just wait it out. Don’t panic sell.