4 Steps to Prepare for the Next Market Downturn | Smart Change: Personal Finance


Eleven years later you would still be waiting for that drop under 1,000, while the market quadrupled to 4,400 and left you behind. If instead of asking when the next dip is coming, you may have invested sooner and enjoyed the gains.

While the market is unpredictable daily, it’s far more predictable in the long-term. That’s why it’s so important to maintain a buy-and-hold approach.

4. Look for discount opportunities

As Warren Buffett said, “A wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.”

It’s no secret that Apple (NASDAQ: AAPL) has been a great long-term investment. It wasn’t immune to the Great Recession though, losing half its value in a two-month span around September 2008. Seeing this drop and recognizing the company’s long-term potential, an investor that bought $1,000 of Apple stock would have over $60,000 today!

Following these steps can prepare you for a market downturn, both emotionally and financially. By making small adjustments today, you can avoid high stress levels later. The next big downturn will inevitably arrive — you can feel prepared and confident when it does.

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