While it may sound counterintuitive, it is actually safer to keep my money in the market during periods of volatility. Although my portfolio may take a hit in the short term, if I stay invested in a diverse array of stocks, I should be able to simply ride out the storm and wait for the market to bounce back.
It can also be wise to buy more stocks during this time. When stock prices drop broadly, this creates opportunities to load up on high-quality stocks at discounted prices.And once the market inevitably rebounds, my portfolio will reap the rewards. I will add more value stocks to my existing portfolio when facing a stock market crash. Value stocks would be a smart addition to my portfolio when the selling accelerates during a crash or steep correction. Not only are the vast majority of value stocks profitable, but value tends to outperform growth substantially during the early stages of an economic recovery.
Comments