What Are The Lessons We Learned From Past Crashing Stock Markets?
Stock market crashes are in the headlines and the discussions of many traders and investors. Obviously, it has profoundly impacted everybody in every aspect. Yet, the valuable lesson is to calm down as getting panicked does not change the situation one bit but even worsen it. Keep reading the blog for more details!
Things That Go Up Will Go Down Sometimes Somewhere!
Ups and downs in the stock markets are unavoidable, yet the slowdowns have been so long that it drags contributing anxiety and chaos. As mentioned in our previous blog, panic trading to compensate for the losses worsened things.
The exciting years before this stock market crash may imply that they are traded more than they should have been. And it partly explains why the markets are suffering from bad consequences.
Sam Stovall, the chief investment strategist at CFRA Research, indicated the signs of upcoming dips in the market. The principle is that what goes up will come down for a while. Or you can hear what people call the market’s cycle.
For example, when S&P gets beyond 20% or over the course of a year since the second World War, traders and investors have been into the fascinating gains. Then, the following trends are nothing other than downtrends!
This year has been a terrible year for many big tech companies due to the continuing drops in their stock’s prices. The noticeable cases list out many big names in the field, such as Netflix, Facebook’s Meta, Peloton, etc.
In recent years, especially amidst the Covid-19 pandemic, Netflix showed its incredible growth and won the trust of subscribers for high-quality content and amazing customer experiences!
However, things changed earlier this year when Netflix dropped its subscribers amidst the rise of many other streaming platforms, such as HBO, Amazon Prime, Disney+, etc.
Besides, interest rates also contribute to the valuations and stock prices. The higher it gets, the worse it can impact the profitability a firm gets. According to the Wall Street Journal, tech companies have been the icons of sustainable growth in recent years. So, the thing that we should think through is whether the present downturn is a temporary phenomenon or a sustained slowdown.
There are many interpretations about the losses that big tech companies have suffered from. One of the popular explanations is that people are no longer stuck in their houses so the use of technology products is decreased. In other words, people now might love to take some air when walking in the park rather than lying on the bed surfing the phones the whole weekend!
Brain Belski, the chief investment strategist at BMO Capital Markets, doubted that we are still in the “early stages of coming out from the zombie apocalypse and the shutdown and the pandemic”. So, the unpredictable ups and downs of price actions might be a part of the next growth!
Don’t Let The Moment Define The Whole Future!
Depression and continuing anxiety are what stock traders and investors have been through the most. And it is understandable when their money keeps running from accounts.
Yet, the most important lesson that we learn from the past stock market crashes is keep your mind cool! Panic does not bring any good so take a deep breath and analyze the markets for the best exit or even staying!
It is not the first time we experienced stock market crashes. So, we can easily see the patterns of the market trends in which downtrends follow uptrends and vice versa.
It indicates that the slump you are in can lead you to the rise if you know how to ‘enjoy’ the moment with a strong financial back-up plan and smart investing strategies.
Warren Buffet might be too bored when his name keeps popping up in the news for the winning cases amidst the chaotic markets! People can talk about how amazing his strategies are but we want to highlight how calm he can be.
Being one of the investing legends, Warren Buffet experienced all kinds of financial markets. He is famous for the long-term vision and strategies that go against the grain.
Don’t hold on to the depressing moments and think the next days are going to be the same! Future has its mystery which can be either good or bad, yet why don’t we take it as a stepping stone for the flying leap? And it is not a nonsense belief but it did happen in the past — the rally of the stock markets after the crashes!
Such a downtime makes it ideal for those who want to grow better and stronger as they have more time to learn to improve their knowledge and skills! Check out our blogs about stock trading.
How about you? Do you think the stock markets can get back to the exciting time? Share your thoughts in the comments below! We cannot wait to hear your opinions!
