Bear markets are a fact of life. But your handling of this situation can make or break your long-term investment success. In particular, you need to avoid the 5 biggest bear market mistakes…
1. Acting emotionally rather than rationally.
2. Believing that a stock is a “Buy” merely because it has fallen in price.
3. Trying to pick the bottom.
4. Expecting the market to snap back immediately.
5. Ignoring history, that times like now have been the best buying opportunities.
Looking at long term charts the best buying opportunities were in times like now. Looking back at every bear market of the past, the worst investors sold at the bottom, the mediocre did nothing and the best investors took advantage of the downturn and bought stocks at attractive prices and/or reinvested dividends while the market was down.
So, it is up to you. In 5 years, you can decide if you have been a bad, mediocre or one of the best investors.
Sven Franssen