Investing in the stock market is one of the best ways to build wealth, but it can be nerve-wracking at times — especially when the market is volatile.
The market has been on a roller-coaster so far this year, and there’s a chance a crash could be on the horizon. There’s a lot of uncertainty in the world right now, and sometimes, uncertainty results in greater volatility in the market.
To be clear, nobody knows when or if a crash will happen. But I’m doing a few things to prepare just in case.
1. I’m continuing to invest
Market crashes can be intimidating, but they can also be fantastic buying opportunities. Stock prices are lower during downturns, which means you can load up on quality investments for a fraction of the cost.
Regardless of what happens with the market, I’m going to continue investing like normal. If stock prices fall, I’ll take that opportunity to invest at a discount. Strong investments are likely to recover from even the worst downturns, so when prices inevitably rebound, you’ll reap the rewards.
2. I’m only investing money I won’t need soon
While market downturns can be a great chance to buy, it’s important to make sure you’re not investing more than you can afford.
Crashes are one of the worst opportunities to withdraw your investments because stock prices are at their lowest. If you invest all your money in the stock market, prices fall, and then you realize you need that cash, you risk selling your investments for far less than you paid for them.
Before I invest anything, I double-check that my emergency fund is robust enough to cover any unexpected expenses. I also only invest money I won’t need for the foreseeable future so that I won’t have to worry about withdrawing my savings during a…
Read complete post here: