The stock market has experienced some intense ups and downs over the last couple of months. After dropping 13% from its peak in early January, the S&P 500 has nearly recovered from those losses in the last two weeks.
Still, though, some investors worry that between the war in Ukraine, high inflation, continued supply chain issues, and other macroeconomic factors, more volatility could be on the horizon.
To be clear, nobody can accurately predict exactly how the market will perform. A crash may or may not be looming. But if stock prices do take a steep tumble, should you keep investing while they’re dropping? And what can you can do to protect your money along the way?
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Keep investing even amid downturns
When the stock market is shaky, it can be tempting to sell stocks to take risk off the table, or to stop investing altogether. However, in most cases, it’s wise to continue investing as you would at any other time.
The market is unpredictable. If you let fear lead you to pull your money out and then share prices surge, you’ll miss out on those gains. And if you reinvest later once prices are higher, you’re liable to end up paying more to get back into those stocks than you previously sold them for.
