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The market these last two weeks have been a little crazy. We are seeing history right here, for all of my other APUSH veterans out there, future generations will be studying this week and possibly writing a DBQ on this topic! I have written about the stock market volatility and how I am preparing my portfolio for a recession.
- Be consistent. Consistently investing when the market is low and high will strengthen your position and will let you weather all the fluctuations in the market. In addition, I think many investors are finally realizing how important it is to be diversified. Especially since you can never see what will cause a market downturn.
- What goes up must come down, and vice-versa. The threat of a recession is always looming, this is because the market fluctuates based on many external factors, like the coronavirus. A recession (on average) occurs every 100 months or 8 years.
- Cash is also a position. If you think you will need the money in 5 years, then you should consider leaving your money as cash rather than risking it in the markets. Since the markets can be affected by many [unexpected] factors.
- If you wouldn’t hold a stock for 10 years, no sense in holding it for 10 minutes.
- Downturns always end in an upturn. Look at how the US economy has expanded since the 2008 recession. This has been the longest expansion in US history, so it only was a matter of time. For the last year, some economists have been saying a recession is coming since one is always on the horizon.
The main thing is to remember how long you will be in the market, I will be in it for the next 30 years. So, it is in my best interest to not freak out. I am only viewing this as a buying opportunity, but I am buying slowly and incrementally because we will not know the bottom of it while it is happening.