You Shouldn’t Worry About the Next Financial Crisis for This One Simple Reason
Yes, the next recession is on its way
Prices on the stock market are falling like lightning and leaving investors in a panic.
Volatility has killed the gains on our deposits.
It catches investors at random, breaks returns, and poisons self-confidence.
It is not the end of the global economy as we know it.
For a very simple reason:
Financial crises have always existed and always will exist
We all remember the last financial crisis. Or the previous one. Or the previous of the previous.
Does the same story repeat itself over and over again?
Yes.
But don’t believe me, believe the facts. Against facts, there is no argument.
Here is the course of the S&P 500 since 1930.
This is old, I know, but as a little twist, you can also look at all the mid and large-sized crises in the stock market.
I bet you had heard about all these crises before.
I did a little more research on the history of global stock market crises and was able to find over 30 financial crises around the world between 1900 and 2017.
That’s right, more than 30!
That means that a market somewhere in the world is wiped out every four years.
It gets even more extreme if you look at the crises between 2000 and 2017.
Here I find a total of 13 minor and major stock market crashes.
That means one crash every 16 months.
What can we learn from this right now?
To be honest, two things:
The next financial crisis is just around the corner
This is a fact. There will always be the next financial or economic crisis. And the one after that. And the one after that.
2. The world kept on turning after the financial crises
And prices also recovered at some point.
Here’s what you should do in the next financial crisis
Super simple.
Same old, same old.
That’s right, the same as always!
You should invest a small amount (month after month or quarter after quarter) over a period of 15 to 30 years.
If you have not already done so, you had better start worrying.
In the long run, it has been proven that no matter whether you start investing in a bubble or during a financial crisis, over time it will stabilize on its own.
If the stock markets are again in the red due to the next financial crisis when you buy a lot of stocks at a very good price.
History always repeats itself.
Seen this way, a crisis is actually a good thing for long-term investors!
The world will keep turning even after future crises.
What we can do is take this opportunity to further increase our portfolio at a reasonable price.
If you have the courage not to run away but to weather the storm, at some point the sun will rise again over the trading floor.
The only way the next financial crisis will affect you
Very simple:
Sell.
If you start to retreat in the middle and run away, you will regret it bitterly at some point in the future.
I will give you that in writing.
The only way to lose money in the stock market is to sell too early.
Remember, during financial crises, even in the darkest times, the earth and the stock market never stopped spinning.
As long as the sun rises in the morning, and people trade with each other, the stock market will not cease to exist.
Stock prices will continue to rise in the long run.