There’s Nothing Wrong With Panicking About Your Wallet – Don’t Do This | Smart Change: Personal Finances

(Maurie Backman)

The last few months have been very difficult for investors. And in recent weeks, stock values ​​have plunged even further, leaving investors reeling.

You will often hear that it is important to stay calm when stock market values ​​fall. And that’s definitely good advice. This is also advice that is truly, really hard to follow. And I should know.

I’m one of those people who writes all the time about the importance of keeping your cool when the stock market goes down. The reality is that the market has a long history of recovering from downturns and rewarding investors who stick with it.

Image source: Getty Images.

But let’s be real – it’s hard to do not get upset when you see the value of your portfolio accumulating in a few weeks or months. In fact, my stock portfolio is down about 25% this year. This is due to general market turmoil and the fact that I own a number of retail and technology stocks, and their stocks specifically have fallen over the past few weeks.

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I try to make sure that I don’t check my wallet balance too often during times like this. But even without checking, I follow the market closely enough to understand the impact of the sell-off on my portfolio. And so far, things are not rosy.

I’m not going to pretend that I’m not bothered by the state of my wallet – because I am. And if you’re worried about your investments, that’s completely natural.

Unfold, but also, breathe

Imagine your stock portfolio was worth $400,000 at the start of the year and is now worth $300,000. If you were to liquidate all of your positions, it would potentially result in a catastrophic financial loss. It is therefore normal to recognize the stress of this situation.

Simply saying, “Hey, your investments lost hundreds of thousands of dollars, but it’s all good, man” just isn’t helpful these days. I am here to tell you that yes, there is nothing wrong with turning against the state of the market. And you can also change your investment approach in light of the recent turmoil if that suits you.

The only thing you should not do, however, is dump stocks while they’re down. If you do, you will only be guaranteeing yourself against losses that could take years to recover.

The fact that my portfolio is down 25% this year causes me to experience a host of emotions, ranging from annoyance to anger to the occasional panic. But the one thing I keep telling myself is that I don’t intend to mine my wallet for decades, and as such there’s no need to get also work. Equally important, I refuse to be a victim of fear to the point where I start cashing in investments and taking losses in my retirement plan or brokerage account for no reason.

stay the course

You may be experiencing a whirlwind of emotions as the stock market turmoil unfolds. And it’s okay to panic about the losses you see on screen, as long as you commit to one thing: leave your wallet alone. You may not be able to simply ignore recent market events, but don’t let them push you into making bad decisions that will hurt you financially in the long run.

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