Coronavirus fears continue to spread, which has caused the markets to drop into bear market territory. Despite a nice recovery on Tuesday, it is a tough time for investors to stay calm and rational as the market continues to sell off this week.
So what should we do next? If history serves as a guide, there is only one sensible answer to this question: It has never been a good idea to sell when everybody else is selling and it’s never been a winning strategy to buy stocks when everybody else is passionately bullish. The best strategy in the past has been to ride out the downturn and experience the subsequent upturn, which may come tomorrow, next week, next month or next year. We simply do not know what the timeline looks like yet.
Bottom Line: Bear markets like the one we have just entered are uncomfortable and can be treacherous, but remember that the real risk is selling at the bottom and missing out on the recovery.In the News, Market Volatility