The market moves up, down, and sideways. New investors should understand that the movement of the market isn’t always favorable. If it goes downward, should you worry about it? That’s a pretty common question I want to answer in this post.
For the past weeks, the stock market has been dipping and correcting. And many investors are withdrawing their investments and putting them in crypto. It’s not a bad move actually. However, seeing investors rush just so they won’t miss out on the pump that’s happening in crypto is quite worrying.
Let me share with you my thoughts about worrying about a losing market.
No-you shouldn’t worry
You know why? That’s because it’s normal! Investors win and lose. There’s no such thing as “no losses.” When you invest somewhere, be it stocks, crypto, mutual funds, there’s always a way up and down. Forget about your worries now and focus on positive things. The market may be losing today but it will bounce back soon, trust me. It’s not the end of the world yet. Everything will go back to normal slowly when the pandemic ends. Trust the process.
Why is the market losing?
Simple, because the market moves in three directions: upward, downward, and sideways. The market is losing right now for some reason. First, it may be following its supposed direction. Investors use technical and fundamental analysis to predict where the market will go. With the data they have, they can predict their moves as well. When the technical analysis tells that the market will move down, investors who are able to see the signal will sell their positions, prompting the decrease of stock prices.
Second, the market may be losing because of the status of the economy. Look at your environment. Do you see anything good that can make companies worth buying right now? As of this writing, the pandemic is still here and it’s continuously hitting businesses. If the environment is like this, the market will follow the happening.
What should you do?
When the market is losing, calm your nerves. You don’t have to panic and sell your stocks just because you’re seeing the red percentage in your portfolio. There are better days ahead. If you keep on panicking, you will drive yourself away from your original investing or trading plan. It’s not good if that happens.
Your emotions play a vital role in your trading or investing strategies. You don’t have to listen to them right now. Set aside your emotions. Divert your attention to something good and production, such as learning new strategies, altering your trading plans so you can recover from your recent losses, watching informational videos to add to your knowledge, talking to someone who can give you tips, and so on. There’s a lot of things to do. You don’t have to dwell too much on your losses right now.
And, don’t forget to keep on saving. You might experience losing right now and you need more funds so you can recover next time. Spend your money wisely!