So the stock market is staggered and the cryptocurrency market seems to be tottering, what do you do? Do you take your money and run? Do you leave your money in and watch it rise? Or do you look as this downward spiral in both markets as an unexpected discounted on quality items? In my opinion you wouldn’t be wrong if you did either of those three, but I think you’d be better served by considering a combination of all three.
Do you take your money and run?
Yes, you absolutely take your money and run. If your portfolio has experienced significant gains over the past twelve months when the market was seeing some of its highest earnings in the past decade, then you should consider taking your original investment off the table and continue to invest the gains. This way your initial investment is protected.
Do you leave your money in and watch it rise?
Yes, you absolutely leave your money in the market and watch it rise. If you have taken your initial investment off the table, then you can never lose because you are now only investing in the earnings your investment initially made. So I would definitely consider keeping those gains in the market.
Do you look as this downward spiral in both markets as an unexpected discount on quality items?
Yes, you absolutely look at this downturn as a discount. Now that you have your original investment off the table, you may want to consider adding some items to your paper and digital portfolio that you may have been eyeing for a while. Downturns in the market to some investors is a time to panic, while for others it is a time to go shopping.
Yes, we know that the market has been artificially propped up to keep things flowing. Maybe this downturn is the market correcting itself to get down to a “truer” value of itself. Will the market continue to tumble? It probably will, but if you consider the three things above, you will have a good chance to come out ahead of the game when the market recovers.
The key here, in my opinion, is to be a smart investor. Why take all of your money out of the market? It literally makes no sense. No one stays inside when it rains or snows, but they dress appropriately to withstand the elements as they go outside. This three-pronged approached is a way to protect your from the markets, as they may continue to stagger and totter.