Most commentary on the stock market boils down to one big concept: Sometimes stock prices go up, and sometimes stock prices go down. Although the daily fluctuations (ups and downs) in the stock market pose risks, in the long run the stock market is often the best place to put your investment money.
Many people are worried about the daily fluctuations in the stock market. They wonder if now is the right time to put money into the stock market, or if it’s better to wait a few months until stock prices are cheaper. They wonder when to buy or sell a particular stock and how many stocks to consider.
In my case, I was able to (mostly) avoid these day-to-day worries about the stock market. I’m a long-term investor, I don’t time the market, and I don’t buy individual stocks. I’m lucky enough to make a good living and have enough cash in my emergency fund that I don’t have to make big bets on stocks of particular companies or worry about the outcome of a day on Wall Street. there is no.
read more: Unlock best-in-class benefits with one of these brokerage accounts
But the biggest lesson I learned in life about how to stop worrying about stock prices happened in 2020, at the beginning of the pandemic.
February 2020 — New coronavirus crash
Everyone is tired of talking about the pandemic, but it’s worth remembering what life was like in February 2020. There were creepy new words in the headlines like “coronavirus,” “quarantine,” and “ventilator.” Fear and anxiety were everywhere. Borders were closed, cruise ships filled with sick passengers, and Americans were stocking up on hand sanitizer and toilet paper.
I’ll never forget how it felt to live through those stressful, surreal, and adversity times. However, many people may forget what happened to the stock market that month. From February 14, 2020 to March 20, 2020, the S&P 500 index fell 31%. No one knew what was going to happen to the world economy, whether there would be another Great Depression, or whether “normal life” would return.
That was the “corona crash.” We have all lived through it. Not panicking strengthened me as an investor. I didn’t sell all my stocks at a loss. At my lowest point on March 20, 2020, I wasn’t worried about the stock market. I was worried about more important things.
finding perspective in crisis
In March 2020, I didn’t even feel like checking the value of my retirement savings. I didn’t sell any stocks, I didn’t panic, I didn’t look at my IRA account. Instead, I was just trying to do my job and take care of my kids (who suddenly came home from school, which I thought at the time might be a permanent change). ).
I still remember how stressed and sad I felt in February and March of 2020. I feared for the health and safety of my loved ones. I was obsessively reading news from around the world, seeing the latest lockdowns, border closures, and case numbers. And I felt a great pre-emptive wave of sadness for every bad news that came our way. I kept thinking about all the families who were still alive and unharmed at that point, but who were about to lose a loved one to the virus.
On top of that, I remember being afraid that the pandemic would devastate us financially. I wonder if my favorite restaurants and local small businesses are being forced to close in the face of a strange new reality where “being indoors with people” is the worst thing you can do. I was worried. I tried to prepare for the possibility of losing all my bank account balance, the possibility of losing all my clients and freelance work, and the possibility of my family falling into permanent poverty.
Stocks go up and stocks go down. But if all stock markets around the world crashed at the same time and we were all experiencing a global crisis, we would all have bigger problems to worry about.
COVID-19 recovery and stock market resilience
And yet…despite the human suffering and many tragic deaths, despite the loss of millions of jobs, the worst economic scenario from the pandemic did not materialize. Humanity has found ways to continue to collaborate, innovate, and invest.
For the rest of 2020, the stock market soared. Through December 31, 2020, the S&P 500 index has risen approximately 63% from its March 20, 2020 low. Throughout 2020, the S&P 500 rose about 16% during the pandemic.
Stocks go down and stocks go up. Bad news doesn’t last forever, and people (and the stock market) find ways to rebuild, adapt, and recover.
How to stop worrying about the stock market
I haven’t been worried about the stock market since the coronavirus crash. As a long-term investor, your goal should be to just keep working, earning, saving, and buying stocks as part of a disciplined long-term plan. There will be crises and crashes. We just have to live and keep investing.
As an investor, there are always ups and downs, and you can be hit with some big shocks and disappointments. But over time, in the long run (and sometimes even the short run), the stock market can recover from large losses. That’s why it’s often a good idea to continue buying stocks even when the market is down. How consistently you invest is more important than how the stock market performs on any given day or year. Even on the best day or worst day or year.
Warning: Our top-rated cashback cards offer 0% introductory APR through 2025.
This credit card isn’t just great; It’s so good that our experts use it personally. It features a long introductory APR period of 0%, a cashback rate of up to 5%, and for some reason, all annual fees are waived. Click here to read the full review for free and apply in just 2 minutes.
