The Market is Down. Now What?
Read this before you panic.
If you've got money in the market, chances are that you've been watching your portfolio take a dip over the last few weeks. Me too.
In times like this, it can be tough to know what to do. Should I panic sell and stop the bleeding? Should I just stop looking at my accounts and pretend like nothing is wrong? Should I be buying the dip even though it doesn't feel like the market is going to recover anytime soon? Let's take a closer look.
Why I'm not worried
I'll admit that it's not fun to see the graph go in the wrong direction and since I am human, it does make me a little nervous. But I've learned that staying the course with my original plan during periods of downturn is critically important—and can actually be the springboard for serious financial gain.
About 85% of my portfolio is invested in index funds, and history has shown that although there are peaks and valleys, the S&P 500 and total stock market index funds have rebounded after every dip. If the market can survive and rebound from the great depression, the 2001 terror attacks, the recession of 2008, and a global pandemmy—I'm betting that it can also survive a couple of rough weeks in May.
With that being said, don't take my word for it. As part of my journey to financial freedom, I follow a number of different creators and influencers within the personal finance space that I've come to trust. Here's what a few of them had to say.
As Think Save Retire's founder and our personal finance spirit shaman guide, I've been watching Steve's Twitter closely for any pearls of wisdom to help me through this volatile period.
You gotta be legit insane to continue selling in this type of market. This is where money is made.— Steve · Millionaire Habits (@SteveOnSpeed) May 12, 2022
One opinion that seems to be common among the millionaires that I follow is that this downturn is actually a good thing where money can be made for disciplined investors. One of the more prevalent mindsets in the millionaire's club is that when the market is down, it's not time to panic. It's time to act, because everything is "on sale".
Whenever I'm feeling nervous about a market down turn and I need some reassurance, Jeremy Schneider is my go-to-guy. Jeremy always supports his assertions with data and he uses visualizations that are really easy to understand. I don't want to follow an "expert" that I'm just supposed to blindly follow.
This Instagram post from Personal Finance Club is a perfect example of why you should think twice about panicking.
By the way, if you haven't had a chance yet to check out Jeremy's wealth building course yet—we highly recommend it. $79 for lifetime access, and it's literally designed to give you the tools you need in order to retire a millionaire.
A Final Word
The dip in the market has created a lot of chatter on the internet over these past few weeks. It's easy to get lost in the hysteria and do something hasty, but I would encourage you to stay focused and make decisions based on data instead of emotion.
The opinions expressed in this article are for general information purposes only and are not intended to provide specific advice or recommendations about any investment product or security. This information is provided strictly as a means of education regarding the financial industry.