A stock market crash is something that worries almost every investor. In fact, it even worries people who don’t have any money invested in the market.
A stock market crash triggers the primal fear of loss. All investors are effected by it one way or another.
Investors who bought stocks just before the crash are the ones who were late to the party. They suffer the biggest losses.
Investors who bought stocks earlier will not suffer losses immediately but might still feel like selling. This is because, in our minds, the fear of a loss is about three times stronger than the joy of a gain.
Many investors freeze in fear. They find themselves incapable of making a hold or sell decision. In other words, should you cut your losses or hold on to your stocks?
Even if they want to buy stocks when the market is down, they don’t know if they should buy new stocks or add to old ones.
If you’ve faced this situation, it’s important to understand that the feeling is normal.
If your portfolio has collapsed in a market crash, you can plan ahead. Use these 5 ways to repair your portfolio.
You can also read more about how to invest in the market today.
In a video, Equitymaster’s co-head of research, Rahul Shah, has suggested to try this evergreen portfolio.
All in all, keep in mind that a stock market crash is temporary. The stock market will recover and so will your portfolio.
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