Oh no! The stock market is having another one of those days when the chart of the Dow Jones industrial average looks like a terrifying ski slope and you're thinking about pulling out your money and putting it into a crawl space, a la Walter White on Breaking Bad.
But that's the worst thing you could do. Resist the urge to go losing it over losses on the stock market! Here are three good reasons to keep calm and invest on.
1. The stock market always recovers
No matter how awful things may look on a particular day or during a particular week, stocks have always gone up over time and have always more than made back their losses.
On Twitter, CFRA chief investment strategist Sam Stovall points out that "sharp & swift sell-offs have traditionally led to quick conclusions & rapid recoveries."
It did take the Dow 25 years to make up the ground it lost during the 1929 stock market crash. But Stovall says don't worry about any kind of market catastrophe now, because he says the economy is in good shape — not headed for a recession.
2. Consider your goals
Aren't you invested for the long haul, working toward a big goal down the road — namely, a comfortable retirement? The worst thing is to go off track by ditching investments just because Wall Street is having a bad day.
If volatility in your accounts keeps you up at night, maybe you need to reevaluate your investment mix. You should be diversified anyway, with some money in risk-free savings, to help you weather these storms.
The best approach is to not look at your battered balances and keep your hands off your portfolio. Think about using a robo-advisor like Betterment or Blooom that will automatically adjust your investments in the face of changing market conditions.
3. It's a great time to buy
When stocks take a beating, don't think about what you're losing. Instead, focus on what you could be buying.
A market plunge or "correction" makes stocks cheaper. If there's a company or sector you've had your eye on, a good time to get in is when prices have been beaten down.
And don't be wary of taking on new investments while the overall market is in the tank. If you set your sights on good, profitable companies, you should do just fine.