We’re facing what could be months of market uncertainty as investors grapple with fear and worry. But there are always opportunities hiding in the chaos. Here are just three to keep in mind.
- Hunt for opportunities amid the chaos. A market downturn means that overall prices have dropped, including those of companies who may be undervalued at the current price. Average investors often give in to panic and can hurt their prospects by buying during a bull market and selling during a bear.
- Using the buying opportunity. With prices depressed, now is a great time to invest. Many investors do the opposite, sitting on the sidelines out of fear. That’s usually a mistake, as it’s impossible to perfectly time the bottom. Missing the ride back up can really hurt your long-term portfolio. Don’t sit on the sidelines.
- Learning the lesson of overconfidence. We’ve had years of a roaring bull market, making everyone look like a genius. Warren Buffett said it best: Only when the tide goes out do you discover who’s been swimming naked.
Related: When Will the Markets Hit a Bottom?
Now is an opportunity to remember that all bull markets come to an end, all prices eventually normalize, and no one can predict the future.
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Quarterly Economic & Market Update: Q2 2022