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Investors: Don’t Panic When the Stock Market Dips

Woman Reading Stock ListingsThe New York Times offered “6 Tips for Investors When the Stock Market Tumbles” to help you not to panic when your investments don’t increase as you would like. When your investments take a dip, you may become quite agitated and very tempted to do something, like sell them. But it might be better to hold on and attempt to sail through the ups and downs of investing because:

“Stocks are most useful for long-term goals. So unless those goals have changed in the last few days, it probably doesn’t make much sense to overhaul an investment strategy based on a blip of market activity.”

The article goes on to make important points to calm anxious investors:

The stock market isn’t your only investment. You may have other assets in your portfolio and you may own property. These other things also promise returns and may not be losing value as your investments are. And if you own nothing but stock, you will also have future earnings to rely upon.

Move your money, miss the rebound. You might panic and decide to put your money elsewhere right before stocks rebound. Those rebound days are important for building the value of your portfolio.

If you find that you are obsessing over your stocks, try not to check on them too often. Set limits on how often you will check. Or wait until you meet with your Fee-Only financial planner.

Give the markets time to recover. Consider this: “Too many 70-year-olds sold all of their stocks in 2009 and are healthy enough to live to 100.” The idea of living until you are 100 might seem far-fetched to you but the point is that the market may improve but you won’t see the increase if you sell in a panic.

As we have already mentioned, investing in stocks pays off in the long term if you can be patient. It might help to rely on the expertise of a Fee-Only financial advisor—that way you don’t have to get nervous each time you hear about stock market fluctuations.