Holding onto stocks during a market downturn will require nerves of steel.
USER MANAGEMENT SURVIVE THE NIGHTS SURVIVE HOW TO
Story continues How to avoid selling during a 2020 market crash Be careful not to panic sell your loved companies during periods of short-term volatility. However, the same can’t be said about those who sold off their stock positions during the dip in March and April this year. Many investors can survive such a short-term setback. Canadian stocks have recovered much of their early losses.Īlthough the main equity index is still down 13.5% from its peak early this year, the picture looks much better.
The worst drawdown that the S&P/TSX Composite Index recorded during the 2020 market crash was 37.4% on March 23. Watching paper losses hurts our emotions, but holding positions through market turbulence was the best action to take during all documented past recessions. Investors don’t necessarily have to lose money during a market crash. I advised against this big investment mistake on February 29, right at the onset of the 2020 market crash in North America. The investment losses will hurt forever, and more so when other investors who held through the bad times start enjoying recoveries. All hopes of recovering from losses will be gone. The worst action one can take during a stock market crash is to sell positions at the dip. But this mainly applies to those in or near retirement. Unfortunately for some, sharp declines in portfolio values mean delays to planned retirement dates or a return to work for early retirees.
Stock market crashes can set us back many long years on our retirement plans. Be careful what you do during a stock market crash! However, it’s our actions before, and during the stressful events that damage our financial health the most. We often try, but can’t perfectly insulate ourselves from their disastrous and devastating effects, especially if they swiftly come upon us as the global COVID-19 pandemic did in 2020. We can’t predict them with reasonable accuracy. Stock market crashes are natural phenomena that each of us will experience usually more than once during our investing lives.
0 kommentar(er)
