However, when the market experiences a downturn, stock prices fall. If you sell your investments when prices are lower, you could end up losing money.
I generally aim to keep at least six months’ worth of savings set aside in my emergency fund. This way, no matter what the market does, I don’t have to tap my investments to cover any unplanned costs.
2. I’m continuing to invest consistently
It can be tempting to press pause on investing when the stock market is rocky. However, investing during market downturns can actually be a cost-effective move.
Because stock prices are lower during market downturns, it can be a good opportunity to buy good stocks at bargain prices. Even if you’re investing in mutual funds or ETFs rather than individual stocks, you can still get more for your money during market downturns.
Instead of waiting until the market recovers to continue buying equities, it’s a good idea to keep investing like usual, regardless of what the market does. If the stock market bubble does burst and stock prices take a nosedive, use it as an opportunity to load up on quality stocks without breaking the bank.