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  • Writer's pictureJames Veal

The Best Time To Invest Is When Things Are Bad

What do most people do with their stocks when the stock market drops? Your first instinct is to sell. It’s human nature. When your investments go up in value, it feels great. But when they decline, selling everything can seem like the best way out of a bad situation.

It might feel painful to keep putting money into the stock market when things look rough, but the reality is that it can help you keep going. Indeed, if you’re dollar-cost-averaging and the market is down, you might actually get more shares for less, helping you in the future.

It’s generally a good idea to invest when the stock market is down as long as you’re planning to invest for the long term. Seasoned investors know that investing in the market is a long-term strategy.

When the stock markets are down, it provides an opportunity to buy stocks at a lower price, which means you can potentially earn a higher return on your investment when the market recovers.

Warren Buffett once said that, “be fearful when others are greedy and greedy when others are fearful.” These two emotions (fear and greed) drive markets.

So, the next time the markets are constantly crashing and you see people running for the doors and trying to get out - you in essence - see possible sales and go back in and pick up premium items (stocks) at bargain prices.

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