Does the thought of a 10% stock market drop make your stomach drop?
Maybe you recall the jitters and anxiety when the last crash came through, and you watched the value of your investments fall… and fall… and keep falling.
Unfortunately, you can expect sharp drops in the stock market at any time. Today, tomorrow, next week. It can happen suddenly, and without warning.
Even within recent memory, there was the dotcom boom-and-bust, and the Great Recession of 2008-2009, where the stock market lost 48% of its value from peak to trough.1 Those who fared the worst were the ones who sold their stocks as the market kept falling and realized their losses.
Watching the markets ebb and flow is like being a surfer watching the waves.
Surfers don’t have the opportunity to do much when the water’s smooth or barely rippling. The fun doesn’t start until the monstrous waves start crashing.
To a passerby, the waves look scary and dangerous. But to a surfer, all they see is opportunity.
Just like surfing, in the stock market opportunity comes with fluctuations in the underlying environment.
Surfers know that a big wave can mean a tremendous and awe-inspiring ride, but it can also mean a big wipeout.
In the stock market, there are typically three reactions, as there are to any kind of potential bad news: fight, flight, or freeze. Sometimes doing nothing (or freezing) is the right thing to do.
Of course, the trick is knowing which one is best for your personal situation! Unfortunately, it’s all too easy to take the wrong lessons from past recessions and market pullbacks, leaving you unprepared for a big wave when the next one hits.
Knowing how to take those rides through rough and smooth will help you not only potentially build more wealth, but potentially lose less when the inevitable dips, recessions, and pullbacks occur.
Just as waves are crucial to surfing, volatility is a feature of the market, not a bug.
Given that no one knows when the next drawdown could occur, are you confident that you’ll be able to ride it out without losing your money … or your mind?
This sensible strategy guide is designed for people who invest in the stock market — just like you — and want to make smart decisions about their money, no matter what’s happening in the financial sector. It will help you master the waves of volatility so you can take advantage of the opportunities that come your way when the ride gets rough.
You’re probably asking yourself questions like:
- What happens to my money when the stock market takes a dip?
- Will I need to make changes to my lifestyle when there’s a drawdown in the market?
- Do I know when to stay put and when to flee or fight in different market situations?
- Are my investments properly situated for the next market movement?
- Do I have a financial professional who stays in touch with me to guide me even when things look bleak?
If any of these struck a chord with you, keep reading…