#MarketDownturn #square $$
Market Downturns Are Unavoidable—Here's What You Can Do To Make The Most Of This One
U.S. stocks fell sharply Friday, pushing the S&P 500 to its third straight weekly loss amid a selloff in technology stocks and rising concerns about the health of the economy.Investors should refrain from pulling out of the market right now, experts suggest.Dollar cost averaging and portfolio rebalancing are good exercises for long-term investors during big market moves.Consider investing in fixed-income securities or small-caps if your risk tolerance allows ahead of the Fed's anticipated rate cuts, some experts say.
The U.S, stock market has been on a volatile ride in recent weeks amid a selloff in big-name technology stocks and rising concerns about the health of the U.S. economy. Major indexes finished sharply lower on Friday, with the S&P 500 posting a loss for the third consecutive week, its longest losing streak since April.
While a look at the headlines in financial news or a peek at your brokerage account could inspire panic, here's what experts recommend you do instead to make the most of this downtrend.
Buy and Rebalance, Avoid Panic-Selling
Chris Mankoff, a CFP and Partner at JTL Wealth Partners, has had clients calling and asking him about what they should do about the recent drawdown. He strongly discourages retirees or pre-retirees from panic-selling in this environment, as doing so might mean missing out on returns down the line.
“Be prepared to have these pullbacks and corrections. They're normal,” said Mankoff. “Let's use this as a buying opportunity. If it’s one of those deals where we keep dropping, [then] we'll keep dollar-cost averaging into it.”
With dollar-cost averaging, when you buy small amounts of a stock as the price is falling, over time your investment cost per share reduces, improving chances of a bigger profit when the stock rebounds.
Sticking to your long-term investment plan doesn't mean doing nothing during big market swings.
