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If youre like most people, you have feelings like fear, worry and dread.
These feelings are completely normal during economic swings.
However, letting your feelings drive your decisions can have long-term consequences on your finances.
Panic often leads to irrational and irresponsiblefinancial decisions, such as selling yourinvestmentsat a loss.
Lets look at a real-world example.
In 2022, the S&P 500 saw an 18.04% loss, according to data byStern NYU.
To avoid losing more money, you sold your stocks at the end of 2022.
The same trend continued into 2024, with a 24.88% gain.
By panic selling, you would have lost out on doubling your investments.
First, stay off speculation pages.
Countless financial gurus like to scare people about market downturns.
After all, these posts are what gain traction and generate views.
By listening to reputable sources, you could avoid panicking.
Another strategy is to set it and forget it.
Once you contribute money to an investment account, consider it gone.
You dont need to check your investment balance every day or be concerned about market drops.
By regulating your investments, such as through automatic withdrawals, you might stay away from panicking.
Educating yourself about historical market conditions is also important.
Its highly unlikely that the market will deviate from this average.
While there may be years of double-digit losses, there will also be years of double-digit gains.
Additionally, its important to remember your goals when you start to panic.
Why are you investing now?
Is it to retire in 20 years?
Investing is meant to be long-term, not for short-term gains.
Finally, change your mindset.
Do you love shopping sales?
Think ofstock marketdrops as a sale.
Its a great time to load up your investments and save money.
Shifting your mindset is a top strategy for weathering uncertain economic storms.
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