A stock market crash offers investors a unique opportunity to grow their wealth. But to take advantage of this crash, you must have a plan in place before the crash happens.
After a stock market crash, most investors make it far worse for themselves because they sell their stocks after the market decline, deep in the bear market, which means they never benefit from an eventual recovery in prices. People often buy high and sell low because they invest purely on emotions. This is a surefire losing strategy
Rather than selling stocks after they fall, you should usually be buying. It doesn’t need to involve market timing, since it can be done automatically with re-balancing. Thus, as the market recovers, you have the potential to earn some gains on the ride up.
And investors that focus on building passive investment income, by buying dividend stocks, REITs, and other income-producing investments, tend to weather bear markets quite well. Dividend income is a lot more stable than stock prices.
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