How to prepare for a stock market crash
4 Great Market Correction Plays we hope helps investors look at market corrections as a opportunity not a time to sell, as many investors have said before ‘buy low sell high’.
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1. Buy an Exchange Traded Fund
Buying an ETF provides an investor with instant diversification in a particular industry or sector, formed around market cap or geographic location. As of 2019 there is more than 2000 ETFs ready to be snapped up just in the U.S, presenting an investor with a diverse range of unique opportunities.
2. Purchase an index fund
For those who like to buy and hold, you could always consider investing into a index fund, as they have shown time and time again to weather market down turns. One good example of this historical success is the NYSEMKT:SPY index fund which strives to mirror the S&P 500 index. But one thing to keep in mind index funds generally charge a small annual fee.
To learn more about index funds follow the link below.
https://www.investopedia.com/terms/i/indexfund.asp
3. Invest in set-time periods
You could try investing once a week, once a month or perhaps every quarter, by doing this it can lessen or remove the worry around attempting to time market entry. Also by averaging into multiple positions over time there is great potential to form a encouraging cost basis that provides great opportunity to generate profit in the long-term.
4. Assess your current portfolio
By evaluating holdings during a market correction, and if the reason you decided to invest in the first place, such as business fundamentals remain the same, you could contemplate buying more stock at a lower price. But if your grounds for investing are no longer being met, you might want to consider reducing your holdings. One thing to keep in mind though is that many successful investors continually stress the importance of never letting your emotions dictate your actions.
4 Great Market Correction Plays Conclusion
We hope you found some of the above information useful in 4 Great Market Correction Plays. Click on the button below to read Cyclical And Non-cyclical Strategy.