If you are a short-term investor or day trader or a long-term investor – whatever kind of investor you are, you have to know how to act during volatile times in the stock market. Because they could be crucial to not lose more money or to create new opportunities to earn even more money than you can make in the normal times. Volatile times eliminate the weak and make them stronger even stronger. That is why it is utterly crucial to know how to act and what to do during volatile times in the stock market in order to survive the stock market. You have to be aware of the possibilities, risks, and act towards them. In this article, we will discover how to survive the stock market during volatile times. And deep dive into what you should do.
What To Do
The stock market, in its essence, is always volatile in the short term, it always fluctuates in a day, week, or month. But in the end, when you look at a chart of a decade, you will see that it always increases no matter how volatile it is in a day or week. This is the most important thing about surviving the stock market in volatile times, to know that in the long-term, you will win. However, if you are a short-term investor or a day trader, this could change. If you are one of these two, what you should do is to be careful when putting your money into a stock and do not buy at the peak point of the day or week. It is risky, and some even call it gambling, but being careful takes the lead. On the other hand, if the market is so volatile that it loses a lot of value in a day or week, let it flow. A couple weeks or months later, you will get your money back if there is no huge crisis that caused that volatility. This brings us to the second point of this article; patience.
Patience
One of the greatest investors of all time, Warren Buffet explains the stock market in a simple sentence, “The stock market is a device for transferring money from the impatient to the patient.” This is one of the best explanations of how the stock market works especially during volatile times. If you panic sell when the price drops or volatility becomes so huge you can not follow the prices anymore, you lose. The key to not losing and surviving those times is to be patient. As you invest the money that you can afford to lose, being patient to not lose money should be your first move. Panic selling never works. In fact, if you have more money, try to buy it the more it goes down. It will eventually go up if you are patient enough and do not lose your money to more patient people than you.
That is why, if the stock market is going through a volatile time, do not panic sell, do not go crazy, just sit back and be patient.