A Pep Talk For a Plunging Market

What do you do when the market has more stomach-churning dips than a roller coaster?  Like now!

Obey the rule of the roller coaster: You only get hurt when you jump off Same with the market. You only lose money when you sell.

So what do you do when the market plunges? Follow the sage advice from investment firm, Ellevest, in their newsletter What the Elle.

Do Nothing.

As Sylvia Kwan, Ellevest’s Chief Investment Officer, explains: “Over the past 93 years, the stock market has gone up by an average of nearly 10 percent a year. But it didn’t go straight up!”

Indeed, markets always do what markets do: bounce around wildly. Like now.

As I write, the market is in Correction territory, which means its fallen 10% from it’s high. Yeah, it may feel like the sky’s falling. Yeah, it may be tempting to make like Chicken Little and run for the hills. But consider this…

“If you had invested in the stock market from 1999 to 2018, and not touched it,” Sylvia explains, “your money would have tripled.” Even with the Dot Com Bubble and the Great Recession.

Had you jumped ship, however—even if you got back in when things calmed down– you would’ve missed the ten best days over that period. And guess what?  You would’ve cut your gains in half.  Just from missing 10 days.

But you want to do something, right? Ok, here’s what you CAN do.

  1. Make sure you’re diversified. “The best way to protect yourself against the unknown is a well-diversified investment portfolio, with a range of investments,” Sylvia points out.
  2. Be patient and think long term.  According to Marketwatch: “There has literally never been a 20-year period in the past century or so that has resulted in a negative return for stocks.”
  3. Shift your perspective. It’s not a crash. It’s a sale!   Prices are cheaper than they’ve been in a while.
  4. Turn off the TV. Shut down the computer. Don’t look at your portfolio. Ignore the naysayers. Instead, take a walk, get a massage, and remind yourself that the market will go back up. It always does.

What strategies do you have for keeping your head when all about you are losing theirs? Leave me a comment below.

Comments & Feedback

  • Kat Knecht

    I read Your newsletter and take your wise words to heart!

  • barbara huson

    Thanks Kat!!! I always love hearing from you!

  • Cara Day

    I go “bargain shopping” starting by reviewing my list of stocks to watch. The list is comprised of those companies that do, create, or sell the things that align with my core values. Every time I come across a company like that, I add them to my list.

    Then periodically review their portfolio. Read up on their leadership team to see if the company has the appropriate people steering the ship, i.e. is the team diverse, is there one or more women on the team – preferably not just in marketing or HR, does the team make good, long-term decisions?

    So when there’s a “sale”, like now, I’m prepared to make an informed decision.

  • Lisa

    Point number 4 was interesting – turning off the big, ugly TV set. I agree!

    I read a study last year that it was proven that Americans LOVE 💕 to buy negative news 🗞. In other words, negative news sells $$$. It’s sensationalized to shock you and give you what you want!

    Most highly intelligent people I know like to watch the news. I think it’s important to watch the news once a week and to read a physical newspaper twice a month. However, I don’t think it’s healthy at all to binge watch news every night. It’s dull.

    For some people it justifies self pity. It confirms their false belief that the world is an unsafe place and not a place they can trust to thrive in. They can project their lack of action and responsibility ontoTrump instead of getting up and doing something and try and use these stories to bond with others. It makes them feel productive and learned.

    I keep my head by staying in my lane. I make financial, intellectual, home, physical, leisure, reading, travel, career, emotional, spiritual, philanthropy, friendship and fashion goals every year. It’s been so helpful during Covid19. I really feel like I’m living, not existing on a sofa in front of a TV.

  • barbara huson

    I totally agree with everything you said. Media knows very well that bad news sells…and really bad news sells even more. I love how you stay in your lane….so smart. You’re not just living…sounds like you’re thriving with that attitude!

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Meet Barbara Huson

When a devastating financial crisis rocked her world, Barbara Huson knew she had to get smart about money… and she did. Now, she wants to empower every women to take charge of their money and take charge of their lives! She’s doing just that with her best-selling books, life changing retreats and private financial coaching.

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