Who should be worried about a stock market crash?

Question

Lets say you have $100,000 in the stock market today. If the stock market crashes tomorrow (think a 2008 crash). Would you recommend a 30 year old to buy more shares of stock at the low prices during the crash as long as it's great stable companies like a JNJ, MO... or would it be better advised to wait for the crash to be over, let the market pick up a bit and invest when it's safe or stay out of the markets completely?

Answer 1

You should have Stop Loss orders on any stocks you now have. A Stop Loss order is a number wherein the stock automatically sells if the stock falls to that level. It is designed to minimize a loss. Long term investors do not buyback the same stock on the 'Bounce' that occurs a few days after an initial crash. Rather, they wait till the market calms down and then buys back in.

Answer 2

The 2008 decline really began in October 2007 and carried on until March 2009, resulting in a 57% decline from peak to bottom in the SP500. So the question is, when will the next bottom be, meaning when is the time to buy. Unlike what Bob, Mr. Wrinkles, and NA think, markets can in fact be timed with a high degree of accuracy. The fact that they do not understand or are incapable of doing it, does not mean that it can not be done. Good timing does not imply perfection, nor is that required. So the question again is how far down and for how long will the next bear market be. A rudimentary analysis strongly suggests a decline to approximately 1400 in the SP500, and may be the place to buy.

Answer 3

"Who should be worried about a stock market crash?" People who are not invested appropriately for their spending needs. Mostly, retired people who still have the majority of their assets in stocks.



If the market crashes, you should buy at the low prices instead of waiting to buy the exact same stocks at higher prices. Since you don't know whether fallen stocks are at the bottom or have farther to fall, you should spread out your investment over several months.

Answer 4

2 things

1) If I knew the market was gonna crash tomorrow I would sell all my stocks



2) If i knew when the market was gonna rise consistently and not fall even more I would put all my money back into stocks





But If I knew both of these I wouldnt be buying stocks I would be making billions selling the info to others



(and despite what "anonymous" says NO market can EVER be "timed" with any degree of accuracy to make the timing usefull

Yes whats gonna happen can be predicted - both the 1929 and 2008 crashes were predicted, (cos it was known that the money fueling the booms could not continue to flow, and when it stopped a crash was inevitable), but NOBODY knew when the crashes would come)



(people say the "crash of 1929" and the crash of "2008"

but the crash in 29 only started in 29, it didnt hit bottom until 1932 - thats 3 years later

between 1929 and 32 it rose a bit several times only to fall back even more

the crash in 2008 started may 2008 but didnt hit bottom until march 2009



In BOTH cases the "crash" was not in itself a single crash - it was a more like a domino effect, that rippled though to affect other things and make them crash

Answer 5

Trying to TIME the market is a losing strategy, proven many times. I would tell a 30 year old with a 30 year horizon to invest their money in stocks in a step wise fashion, means divided your investment in 6-12 equal amounts and invest that amount in the market in 6-12 monthly amounts

Answer 6

the 30 year old needs to learn how to read stock charts.



There is no guarantee of correctly predicting the market future, but learning to read charts will prevent a major loss of capital if you buy at the low prices, then sell immediately if you notice prices going still lower.

You might be aware of the October crash followed by a March crash.

Go ahead, ask me how I know.....

Answer 7

Let's pretend that instead of buying stocks, you were buying cans of cat-food to eat after you retire....you already have 10,000 cans "saved up" that you paid an average of $1 each for....enough to feed you three times a day for almost ten years!



The price of cat-food unexpectedly drops to 75 cents a can.....what do you do? Sell all the cans you have? Or buy MORE while the price is down?



Hopefully the smart answer is obvious!



Presumably you wouldn't wait until the price went back UP before loading up on bargain cans.....would you?



Buy buy buy!



Bye-bye!

Answer 8

I invest in a non traded REIT and get 7.5% interest no matter what the stock market does.

Answer 9

you better know the merits of the company's stock you plan to buy at reduced prices, even the best of companies don't survive 'crashes'

Answer 10

Stockholders who have not researched nor picked the right stocks.

Answer 11

As painful as it is, keep investing the same amount you would have before hand.

Answer 12

buy into the dip and buy the dip

Answer 13

buy into the dip and buy the dip

Answer 14

buy into the dip and buy the dip

Answer 15

Buy more.