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I’ve been searching the headlines to see if experts think we’re in for another stock market crash.
I admit, it’s partly for fun. This is because it is a train that people love to get on. And it has been said that for every accident that actually occurs, experts predict 10.
However, I found one thing that scared me a little: “If the stock market crashes, will I lose all my money”? It seems to be a popular question. And I think we should put him to bed right now.
Lose my money?
Experts consider this to be highly unlikely. Investopedia, for example, notes that we “It may lose value, but that may be temporary.“.
We would have to be very unlucky to lose everything. Like recklessly putting all our cash into a stock that goes bankrupt, or something like that.
What really is an accident? There is a general consensus that a correction is a 10-20% drop. So a drop is a drop of more than 20%?
Well, the events of early 2020 were widely described as a collapse. And at its lowest point, the FTSE 100 briefly fell 30%. So a big drop, but not close to 100%. And two years later, he had recovered all his losses.
Headlines
We can try to protect ourselves against volatility and reduce our losses in a stock market crash by diversifying across sectors and holding them for the long term.
But will we have another accident soon? There are many talking heads who are constantly negative and talk a lot with every breath they take.
Craziness?
He S&P 500 It could collapse by 50%, 60% and more, according to various sources. And some are comparing the American bull market to the craze of Tulip Mania and the South Sea Bubble.
S&P 500 stocks look a little hot and could fall. But let’s keep some rational heads, shall we?
Nasdaq On the contrary, the shares seem cheap to me. And no one can convince me that the FTSE 100 is overvalued right now, not when dividends are forecast to set a new all-time high in 2024.
Listen to the good sense
When I dig below the surface, I really find common sense.
MarketWatch writer Mark Hulbert says: “There is a one in five chance that in the next 30 years the US market will suffer a drop of more than 20% in a single day.”
As a long-term investor, I can live with that, especially since most crises tend to recover fairly quickly.
History points out that there is always the possibility of an accident. But the odds are low and increase the longer our timeline.
So no, I don’t pay much attention to those who look for the most alarming headlines to get attention. I prefer rational shots that put things in proper perspective.
what will I do
And if we see a decline in 2024, I will buy as many fallen stocks as I can. Because buying low to sell high in the future is what we all want, right?
