Will This Market Crash?

Hey there Money Saver! Welcome back to another week of How to Save A Buck, where we explore ways of saving money in personal finance, credit cards, and investing! Check out my archive here!

Have you checked your retirement accounts lately?

WOOHOO!

The market rally in the last 3 months feels like going up a roller coaster hill - but there’s no drop!

But with the stock market reaching new highs, are you wondering if it's time to cash out and avoid an inevitable crash? While fluctuations are normal, history shows us the power of staying invested over time, even when things get bumpy.

Let's rewind a few years to 2018. The year started strong, only to plummet 20% in December, leaving many investors panicking.

But fast forward, and by year-end 2019, the market had recovered, finishing 31.5% higher than its December 2018 low!

This wasn't an isolated incident. In 2011, the S&P 500 dipped nearly 20% before closing the year up 1.05%.

These examples highlight two key points:

1. Market corrections are normal. Don't let short-term dips scare you out of long-term gains.

2. Time is your friend. Staying invested allows you to ride out the waves and benefit from the market's overall upward trend.

But how can you navigate the ups and downs? Here are some tips:

• Invest consistently: Automate contributions to your investment accounts, regardless of market conditions. This helps you avoid emotional decisions based on short-term fluctuations.

• Diversify your portfolio: Spread your investments across different asset classes like stocks, bonds, and real estate to mitigate risk. This prevents you from financial ruin if you invest all your money into one thing that crashes.

• Focus on the long term: Don't get caught up in daily movements. Remember, you're investing for your future, not next week.

This all drives home the point that even when the market is at all-time highs you should still invest. You have no idea when the market may fall, and even when it does, you’ll still invest and get cheaper pricing.

Want to learn more about specific strategies and overcome your investing anxieties? Check out our previous posts:

• Why Consistent Investing Wins Everytime

• Why Market Timing is Foolish

• How to set up your automated financial life

Remember, the stock market may seem like a rollercoaster ride, but with a calm, informed approach and a focus on the long term, you can build a brighter financial future.

So, is the current rally too good to be true? Only time will tell. But by understanding market cycles, staying invested, and employing smart strategies, you can position yourself to weather the storms and reap the rewards.

You’ll also be prepared for that inevitable rollercoaster drop.

Save On,

Chris