There's nothing scarier than a crashing stock market to make you
second-guess whether you've done enough personal financial planning to
make it through what could be tough times ahead.
But by keeping a few simple tips in mind, you can ensure that no matter
what happens in the markets in the days and weeks to come, you'll be
comfortable that your financial plan will ultimately bring you success
in reaching the goals you've set for yourself.
Theory vs. reality
It's all well and good during
a bull market to think hypothetically about what you'd do if the stock
market dropped dramatically. In fact, many investors explicitly wanted a
correction like the one we've seen over the past month or so, hoping
that a pullback would let them buy once-soaring stocks at somewhat
cheaper prices.
Yet, when the correction actually comes,
it can be a lot harder to follow through on the plans you made during
calmer times. In the past two days, the Dow has fallen more than 550
points, with today's 354-point drop marking the worst day for the market
since November 2011. Suddenly, the explanations for why stocks are
dropping seem like they could continue to drag the market far lower,
making stock purchases seem premature. (more)
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