How to Cope with a Market Downturn

With the way the stock market has dipped in the last few days, it’s easy to get overwhelmed.

It is was as though the bears would devour everything in sight. Anyway, they can’t. The Bears are just as part of the market furniture as the Bulls.

These are some ways you can cope with the current trend in the market.
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Stay Calm – There’s absolutely no need to panic. The downward pressure we are seeing is not unexpected. It typically happens every four years, when we have elections.
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Stay Focused – Remember why you came into the market in the first places, so don’t get distracted. If you are investing for a long-term goal, then you might be better off ignoring the noise in the market. Your shares are all still there and the company is still doing business. So even though your brokerage statement shows a dip in the value of portfolio, what you own hasn’t changed.
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Don’t get scared out of your stocks – It isn’t a great idea to be selling at this point when the market has falling this much. By selling now, you will be booking big losses.
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Average Down your Costs – If you are a long-term investor you should use this opportunity to buy shares that are going on ‘sales’ to improve your overall purchase cost.

Be Diversified – If you aren’t already diversified (i.e. own a portfolio that contains a mix of stocks, bonds, cash and other investments), then this is a good time to get that done.
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Prepare a shopping List – At some point, the market will hit its bottom and start to rise, you need to start doing you research to identify those stocks that you can buy at bargain prices.

Think about this, does a declining stock market really affect your daily life? Probably not. I’ll imagine you still have a job/business that still provides you with enough income to cover your bills. So, perhaps you don’t need to be jumping up and down over a short-term market movement.

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