The Bull Market Is Over. Here's What to Do with Your Stocks.

• Author: Kelly Cooke
• Posted: 2024-11-08

The longest "bull market" in history (in short, this means a market in which stocks generally continue to trend upwards) is officially over. This is likely due to the cut coronavirus fears have spurred into the worldwide economy. Some industries, like travel, have been devastated and will likely never return to what they once were. However, other industries, like food service, may be temporarily damaged but will most likely recover.

In order to avoid the atrocities of another Great Depression, it's imperative that savvy financiers follow these tips to avoid losing a good chunk of their own money. If you have a huge amount of money tucked away in stocks or you're about to retire, it's best to see a CPA to verify this information.

Do Not Panic Sell

Don't panic! Panic is exactly what set off the Great Depression of 1929. If there is one piece of history that we should take to heart, it is that preventing a Great Depression is quite simple: when the market has a sharp downturn either sell or hold. It might be tempting to "liquidate" your stocks. After all, you'd be much less stressed, right?

Chances are that you simply want the best for you and your future generations. Stocks are known to be volatile, and "bull" and "bear" markets are temporary. By selling your stocks now, you are probably getting some of the lowest prices in history and therefore are going to lose a significant amount of money. Rather than panicking and dropping your stocks just to guarantee you have some cash left, it's better to hold on your current stocks. Following that, the next suggestion may make more sense.

Buy More

Yes you read that correctly. You should actually buy more of non-travel stocks if possible. With bond values dipping and available at record lows, major corporate stocks at record lows, and more, now is actually the time to buy stocks. The reason is that people are panic-selling these (something we already discussed!), so there is too much supply for the market's demand.

If you have raw cash in a retirement account or have the extra money to spend in general, buying stocks would be a wise decision now. It's likely common sense will return shortly, and people will be purchasing their stocks back soon. However, many will be looking at their portfolios and freaking out, selling everything in sight until their stock is depleted and their accounts are left with a devastatingly low amount of cash.

Wait for Bans to Be Lifted

The Trump administration has recently banned travelers coming in from Europe after record death tolls hit Italy from coronavirus. Previously, only some Asian countries were banned. These bans could also cause mass hysteria, given that people will see some type of apocalypse or doomsday scenario imminent, when the fact is that these restrictions are simply temporary. They are designed to prevent the coronavirus from spreading faster than it needs to spread in the United States.

These bans will cause the market to constantly go up and down. Fluctuation of risk like that typically isn't worth it unless you're very well-trained in trading. Even then, it can be a very risky endeavor, and most professionals avoid markets that are extremely volatile, such as the international travel market right now. Every hour, the market drastically shifts one way or another as some people are trying to make fortunes while others are trying to preserve theirs.

What to Do, in Short

In short, the first important thing to remember is that this will all come to an end (no, not in the form of the apocalypse, as some conspiracy theorists say). At some point, the market will finally regain normalcy, and most industries will return to something similar to what they were.

If you don't have the extra money, that's fine. Simply do not withdraw from a 401(k) that requires cashing stocks or bonds at the moment, as you'll become part of the "panic withdrawal" issue and likely never get anything close to what you should. Simply hold. If you have the extra money, do some research and purchase some stocks that are likely to regain traction.

The coronavirus is a serious health hazard and shouldn't be taken lightly, but it can have financial gains for those who remain calm and play the market correctly!