Stock Market Crash? Here’s What to Do: How to cope with a stock market crash

A stock market crash is like a hurricane. You can’t control it, but you can prepare for it and recover from it. It’s hard to imagine, but there are times when the stock market will crash. No matter how much we hope for a steady and predictable market, the truth is that it’s impossible to predict the future.

Recently we saw the bitcoin crush and many investors found themselves between a rock and a hard place. We saw some try to salvage their saving by making huge and immediate withdrawals to try and prevent further losses. At the same time some took the wait and see stand.

When you find yourself in the middle of a stock market crash, it can feel like your whole world has been turned upside down. But there are steps you can take to keep yourself afloat and get back on track once things start looking up again.

How to cope with a stock market crash

Don’t panic

Panic is the worst enemy of a stock market crash.

When you panic, you make rash decisions that are likely to be detrimental to your finances. A stock market crash can cause you to sell your stocks at a loss, but if you have time, it’s always better to wait out the storm than to jump ship.

Panic is never a good idea when you’re trying to make smart financial decisions. It leads you to overreact and make rash decisions that can cost you more in the long run.

When a stock market crash happens, it’s important to remember that this is not the end of the world, it’s just an unfortunate event that happens from time to time in any economy. The only thing we can do is try our best to make sure it doesn’t happen again soon.

Don’t sell

When the stock market crashes and your investments start to lose value, it can be tempting to sell. But don’t.

The last thing you want to do is sell immediately when there’s a chance that the market will recover in a few months or even a year. If you need to raise cash, consider selling some of your non-essential assets and using those funds to pay off debts or make other investments.

That said, if it’s absolutely necessary for you to sell some of your investments, try doing so gradually over time instead of all at once. This will help minimize losses and maximize gains as the market fluctuates more quickly than usual during a crash period like this one.

Take a look at your portfolio

Whether it’s the end of the world or a temporary blip in your financial life, a stock market crash can be scary. It’s important to take a look at your portfolio and make sure you’re not holding on to any stocks that are likely to tank. If there are any, sell them! Even if they’re just losing value slowly, there’s no need to hang on when you have other options with better potential.

If you’re feeling really worried about what happens if this keeps going, consider putting some money into a savings account so you have cash on hand in case things get worse. This way, if you need to tap into it immediately, you can do so with less stress than if you were relying solely on your investments for income and savings.

Ride it out

The stock market is a roller coaster, and you can’t expect it to go up all the time. If you’ve been investing for a while, you know that there are ups and downs, which is why I recommend keeping your money invested for the long term.

When the market crashes, it’s important to remember that you are investing for the future not for today. Your investments may not be worth as much right now, but if you ride out this storm and stay invested in a diversified portfolio, they will eventually rebound and bring in more money than they would have if they’d been sold at their lowest point.

Review your tolerance for risk

One of the best ways to cope with a stock market crash is to review your tolerance for risk.

Many investors have no idea what their tolerance for risk is until they lose all their money in a crash. If you’re not sure how much risk you can handle, consider taking a risk assessment test. These online tests are free and can help you figure out if you’re ready to invest or if you might need to wait until you’re more experienced.

If your financial situation is already tight and you don’t have money set aside for emergencies, it’s important to keep in mind that even if the market crashes, there are still ways to make money without risking anything. For example, investing in real estate or starting an online business can help protect your assets and grow them over time without exposing them to any risks associated with stocks or bonds.

Takeaway: If you don’t panic and follow these steps, you can ride out the stock market crash and come out stronger when it’s over.

Read>>>How Cryptocurrency Is Disrupting the Financial System

Seek advice from others

One thing I recommend is seeking advice from others: your friends and family, or even someone you’ve never met before but who has been through a similar experience. If you don’t know anyone like that personally, there are plenty of online forums where people from all over share their experiences and advice with each other.

Another great way to cope with a stock market crash is to take some time for yourself. Take a walk in nature or take up a hobby that will help you relax and recharge after a stressful day at work.

Takeaway: Stock market crashes can be stressful but it’s important to keep a level head.