Experts unanimously agree: It’s essential to remain calm when markets are dropping.
For investors, that can be easier said than done, especially with stocks plummeting in recent weeks amid the coronavirus panic.
Luckily, you can forget about the short-term. (Grow)
“You don’t buy or sell your business based on today’s headlines,” legendary investor Warren Buffett said recently in an interview with CNBC. The coronavirus “is scary stuff,” he said, but added, “I don’t think it should affect what you do with stocks.”
No matter what’s temporarily rattling the markets, it’s a good idea to do your best to keep saving and investing, Jason Lambert, the president and CEO of Northwest Financial & Tax Solutions, near Portland, Oregon, told Grow last fall. “Stick to your plan,” Lambert says. “You can weather the storm.”
Market ups and down are normal. In fact, daily swings in excess of 1% have happened on about 27% of trading days in the past 20 years, according to FactSet data analyzed by Grow. And they can be a great opportunity for long-term investors to buy at lower prices.
Warren Buffett recently told CNBC that he doesn’t think “there’s any way to predict” what the market will do in the coming weeks or months. But he’s confident in the long-term outlook. “I can come to a pretty firm conclusion that 20 or 30 years from now, American business — and probably all over the world — will be far better than it is now,” Buffett said. With that in mind, he says, investors should embrace the buying opportunities that come from lower prices.