I recently read the article DOs and DONTs of Market Crashes by Barry Ritholtz and liked it so much I wanted to share it with all my clients and blog readers. It can be found here: DOs and DONTs of Market Crashes
The article includes Barry’s advice on what you should do when markets temporarily crash and will find recommendations similar to what you are always hearing from the Ruedi Wealth team such as:
Do take notice at how cyclical markets are.
Don’t react emotionally.
Do stick with your plan.
Don’t try to time the markets.
Do notice your own state of mind.
Don’t take actions while in a state of discomfort.
Do notice the panic around you.
Don’t rely on gurus, shamans or talking heads.
I’d even like to add a couple:
Do buy more – that is, if you were going to already, don’t try and time the market. But if you are currently contributing 8% to your 401k, why not increase your contribution to 10% or 12% to enjoy the sale.
Do talk to a financial advisor – temporary declines are when an advisor really gets has the greatest impact on clients. Even if you are not going to jump off the cliff and sell everything in your portfolio, sometimes it helps to have a calm voice to talk to for peace of mind and assurance you are doing the right thing.