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Editorial Invest in Slovakia
Despite the bright prospects that scientists have given us as humanity with the COVID-19 vaccine, some people, and especially stockbrokers, remain pessimistic and admit that the market could start to fall again in 2021 after more than a decade of growth. What to do if these predictions come true? We'll tell you in today's article.
We could experience the market crisis in March, when the market saw its biggest fall since the European debt crisis in August 2011. Such rapid market declines are a nightmare for investors, and especially the less experienced ones can make a lot of trouble. So how to handle them?
Experts agree that In a stock market crash, the best strategy, at least for a while, is to do nothing at all. A market crash is nothing more than investors panicking at the negative outlook and deciding to exit their positions.
However, if you have no better use for your invested money and you have invested with a long-term horizon, you have no reason to panic.
First of all Never buy stocks with money you will need in the next few years. If you plan to buy a home, start a business, or use the money for anything else in the next 5 years, be sure not to put it in the market.
The market is a volatile, almost living organism that rises and falls, but in the long run of a decade grows on average by 7-9 %. The risk of short-term investing is that by the time you need the money, the market may be, to put it popularly, down and you will be forced to sell your positions at a loss.
You will also find it helps to increase stability A family reserve fund of cash held in a high liquidity savings account. It should amount to 6 months of your household expenses. It will support you if you lose your job or experience unexpected health, car or pet-related expenses.
Counterintuitive as it may sound, crisis is the best time to invest. Shares and other securities are held "on sale" and you can buy more shares than usual for a certain amount of money. Some investors literally wait with free funds for such market falls, when they can buy more profitably and thus record Significant increases in investment immediately after the market recovery.
Our best advice, then, is that if there is a decline in the value of shares in 2021, be sure to avoid selling them at a loss, and vice versa take the crisis as an opportunity to increase the value of your investment portfolio and secure a better future for you and your family.
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