The stock market crash 2020 that many analysts were predicting will happen, is finally here. What does this mean for your investment portfolio? And what if you’ve never invested before? Is this the right time to get in? In today’s episode of the Invest Diva movement, I address the two types of panic that are going on right now; the coronavirus panic and the stock market crash panic…
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The Stock Market Crash 2020 Panic is Real
Even those who know a market drop is basically a stock market sales season sometimes can’t help but worry.
So I’m going to address two types of people;
– Those who are already invested and their portfolio is down
– Those who haven’t invested and are scared to get started now
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The first type of investors probably bought stocks at the top of the market when the markets were at the highest level hoping the markets will continue going up.
And now your portfolio is just dropping is in the red is in the negative and every morning you wake up and you panic when you see your portfolio.
Those who haven’t invested yet may be scared to pull the trigger. They don’t know when to start or if this really is a good time should they wait a little bit longer.
So I’m going to go deep down. I talked about both of these with our insider club in the past few weeks. So, I was hoping that this will also help you with your portfolios and your investment decision making for your financial future if you are a medium to long term investor
This is not for day traders. This is for medium to long term investors who are to looking to become in control to be in control of their financial future.
A Medium-Term View at the Dow Jones Industrial Average (DJI)
Today I’m looking at the Dow Jones Industrial Average (DJI) to give you some perspective about investment opportunities for long term investors during a market crash. If you’re a type of investor who just bought stocks right at the peak of the market and before the crash, you may be in panic mode right now. But I’d like you to take a moment and take a look at what happened in 2008. If an investor had bought stocks at the then all-time-high, right before the crash, they probably felt the same way as you do right now.
But what I wanted to show you, first of all, a more recent crash at the beginning of 2019. The markets had just marked their new all-time high at 26,822. And then from there, we had this massive drop. Now, of course at this time, also a lot of people were having a panic attack. But some people were buying their way down.
Guess what happened afterward? The markets continued going up.
So even if you had just bought at the all-time high at the time, you still would have been net positive and for the year.
You would have been well above where you got in. Now of course not everybody took profit out of that and now the market is below where it was even before right?
It still hasn’t reached the lows of that time around which I think that it will go down to at least as low as $22,494.
That is the 50% Fibonacci retracement level.
How Long Should You Wait Before You Buy the Dip?
If you take a look at every market pullback, it has at least gone down to the 50% retracement level after it breaks below the Ichimoku cloud. So that’s one reason why I do believe that we still the worst is yet to come.
Putting a positive spin, we could have more stock sales. I have been a little bit ahead. So the reason why I buy my way down is that we’re never can be so sure. Of course the majority of times it’s gone to 50% but sometimes it just bounced back up. With coronavirus, we don’t know what’s going to happen tomorrow. Are they going to find a minute? find a cure for it. I don’t know. Like, literally this morning, one of my friends send me an article an Israeli company thinks that they have, they may have found a cure.
Now, if that actually turns out to be true in a week, then we’re going to see a rebound, maybe even before it reaches 22,000. If it doesn’t, then we probably will see further drops.
But should you panic if you are an investor who bought stocks at the market peak?
I’m not gonna tell you the answer. I’m just going to show you something that will give you perspective and you probably are already familiar with it.
Stock Market Crash 2020 Versus 2008 |Dow Jones Industrial Average (DJI)
What happened in 2008? The markets had reached their all-time high, which at the time was only $14,000. Now the markets have doubled.
And then what happened? The markets crashed and crashed.
It went down all the way to 7000. It got half in price. If somebody had bought at the peak, obviously throughout this whole year and a half of the markets were dropping, they would have panicked.
If they were just chasing the markets down, they still weren’t sure what’s going to happen. And nobody knows what’s going to happen.
But if history has Any has taught us anything is that what goes down must come up. And vice versa, what goes up must come down. And that’s one reason why we don’t even buy at one price at one set price either we buy as the markets grow.
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