4 Ways to Survive a Stock Market Downturn During a Crisis

stock market chart showing graphs

Have you seen the market lately? I have personally lost thousands of dollars in my Roth IRA and 401k. All of my gains from 2019 are completely wiped out. In fact, my balance in my highest grossing account is currently negative by 7%. How deflating is that?

So when scares like the coronavirus happen, what do you do to mitigate the losses in your retirement savings? If you have been paying attention to any of the investment communities online, you would notice a pattern. There is a lot of back and forth between liquidating your assets, or holding long term. 

With all of the world news affecting the stock market, I have been able to deploy my market downturn investment plan. So how do I behave when the market falls? Here are 4 things that help me keep on top of my retirement savings.

The strategies discussed in this article are for educational purposes only. This article does not represent financial advice. You should pursue a financial professional for any investing needs. There also may be affiliate links in this post. Please read our full disclosure for more information.

Fight the urge to panic

grayscale photography of man opening his mouth

I know that the news has a direct effect on the market, but I am going to be completely honest. The last few bullish years of the market had me completely sure that I have seen the worst of the economy. As foolish as that sounds, It’s easy to forget that a lot of the younger generations have not experienced a real stock market downturn. 

Whenever the market is not moving in my favor, I just control what I have power over. Myself. Outside of people who plan to retire in the near future, most of us do not need that money. I personally do not plan to enjoy my Roth retirement for another 30 or more years. So since I have no control over how my money performs in the market, I focus on staying calm, and knowing that the market bruise will heal itself in time.

Listen for news updates on the market

man sitting on bench reading newspaper

Nothing fascinates me more than reading all of the opposing opinions in the FI/RE and personal finance forums. There is something about soaking up all of the knowledge from fellow investors that you may not have thought of yourself. While I tend not to take advice form random people on the internet, It is a great opportunity to research a topic that could benefit you in some way.
 
The media is also a great place to take note of how the market bends to its will. I take great pleasure in studying which news makes the market rise vs. tank. I only wish it were more predictable! My go to for stock analysis, and market updates is definitely Morningstar, because a monthly subscription gives me access to a wealth of knowledge. From stock analysis, to certified rankings, It is something that I look forward to with my morning coffee.

Deploy cash into discounted positions

person holding 100 U.S. dollar bill

Hopefully you have been accumulating a good cash position while the market was on a rally. Whenever I start to feel scared about the status of my portfolio, I beef up my emergency fund. This is as far as I let the fear take me, and I act while the market is doing well. This way, I will have a large enough accumulation of money to use when my watchlist prices become more attainable.

I like to put money into my account once it hits at least 1000 dollars. This way I feel like I am entering into a substantial position. This is where the fun begins! Chances to buy on a potential dip don’t come too frequently, and now is a great time to take advantage of the market downturn.

Conclusion

These are the four ways that I will be taking advantage of the current state of the market. how have you been moving your money during these scary times? Are you buying more positions? or are you going to be moving your money into a cash position?

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