The biggest crash in world history is coming?

Indeed, the markets look really ugly these days.

Market Crash.

Rising Interest Rates , Mortgages Rates in UK, Property Crisis in China, Russia and Ukraine War, Slower Money Supply Growth, Recession Fears, the list goes on and on…

How has the past bear markets been?

Start and End Date% Price DeclineLength in Days
11/28/1980 – 8/12/1982-27.11622
8/25/1987 – 12/4/1987-33.51101
3/24/2000 – 9/21/2001-36.77546
1/4/2002 – 10/9/2002-33.75278
10/9/2007 – 11/20/2008-51.93408
1/6/2009 – 3/9/2009-27.6262
2/19/2020 – 3/23/2020-33.9233
Average-34.94292

Bear markets are indeed normal. There have been 26 bear markets in the S&P 500 Index since 1928. 

Bear markets tend to be short-lived. The average length of a bear market since 1980 is 292 days, or about 9.7 months. This is significantly shorter than the length of a bull market, which is 991 days, or 2.7 years.

What should you do in times like this?

1. Dollar Cost Average  

Dollar Cost Averaging (DCA) into stocks/index is what truly challenges your conviction during a bear market. This is the best time to  lower our average cost of a given stock at these periods.

At the end of the day, this frequently magnifies gains compared to exiting the stock market while stocks are down. That strikes me as a really wise decision. Furthermore, because fractional shares are now available, you may also easily do it with individual stock or ETFs.

2. Best Time to pick up new stocks

When the market crashes, I am always eager to buy new stocks. Of course, fundamentally solid stocks with a huge economic moat.

This is when I will pull out my watchlist of companies and determine which ones have the largest margin of safety. Not just that, but figure out what caused the market to crash. We must also consider if the stocks in which we have invested will be able to weather this terrible market.

Be fearful when others are greedy and be greedy when others are fearful.

Market Crash

Warren Buffett once said, “Be fearful when others are greedy and be greedy when others are fearful.”

3. Look at the long term

During a down market, it is critical to consider the long term. We should never get emotional during such moments. To begin with, if the companies in which we invest are tremendously lucrative and create significant free cash flow. There is no need for us to sell even though the market is in a panic.

For any investor who did not sell any of their shares (assuming that the firms are fundamentally sound), their invested money would have returned to its original level within a few years and then exploded in value over the next half-decade.

6 Steps to signup and qualify for the Welcome Reward by Moomoo SG

  1. Register for a MooMoo SG Universal Account  and download the MooMoo App on your phone
  2. Open an account (Singpass supported for quick approval) :  
  3. Two different ways to get free stock
    1. Option 1: Complete a net deposit of $100 to get 4 chances to draw a stock between $3 – $2000. Ensure that you maintain an average asset balance greater than $100 for 60 days
    2. Option 2: Complete a net deposit of $2000 to get 10 chances to draw a stock between $3 – $2000. Ensure that you maintain an average asset balance greater than $2000 for 60 days
  4. After signing up for the MooMoo SG Universal Account using Learn To Invest link, email us with a screenshot of your MooMoo SG Universal Account and we send you an exclusive portfolio watchlist 

Our Stand

Bear markets can be excruciating, but they are typically brief. While it may appear that selling during a bad market would be ideal, timing the market may be what everyone does, even for pros. This implies that the most essential thing an investor can do is choose high-quality assets with the purpose of holding them for the long term. This is not easy while maintaining a close check on positions in growth companies and perhaps volatile investments.

Personally, in Learn To Invest, is this the biggest crash in world history? Who knows?

No one has a crystal ball to predict the future. Instead, what we can do is to stay in the market and leverage the cheaper stock prices available to us. Above are 3 simple steps we believe you can take to tide through a market crash.

If you are keen, check out our articles on other analysis: Crypto TokenomicsRisk come from not knowing what you are doing, MapleTree Logistics Trust and Trust Referral Reward.

Disclaimer: The information provided by LearnToInvest serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. This advertisement is not reviewed by the Monetary Authority of Singapore.

close

JOIN OUR NEWSLETTER

Leave a Reply