Should You Worry About The Stock Market Crashing?

Andrew Wagner

Always anticipating an unfrequent stock market crash means you lose out on big gains.

There have been stock market crashes but if you spend all of your time worrying about the next one, you could miss out on big gains, according to The Wall Street Journal.

There has been a lot of talk about an upcoming recession, and this Tuesday is the 90th anniversary of the most known, Black Tuesday. Black Tuesday is often regarded as the start of the Great Depression in 1929. Although, there were other stock market crashes in October 1907 and 1987.

The fact that multiple recessions have fallen in October does not provide evidence of the month's results becoming a pattern, but investor sentiment tends to be wary during the month. “It’s fundamentally a fool’s errand” to try to predict a crash, says Chief Investment Officer of Universa Investments Mark Spitznagel, whose fund profits by betting on downturns and previously made $1 billion during the 2010 "flash crash."

According to Putnam Investments, missing the U.S. market's 10 best days in the 15 years through 2018 would result in half of your final portfolio value. If you missed the 20 best days the result would be two thirds less than your final portfolio value. Investing is not a short term endeavour, you have to be okay with potentially losing a large portion of your portfolio in market downturns.

A stock market crash might be coming, but worrying about when it will come could lead to missing out on big gains.

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Economics, Finance and Investing

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