The stock market conditions are not always friendly and always go up and down. As with the current pandemic, many company stock prices have plummeted. Thus, we gonna talk about 3 things that traders should do when stock prices drop.
However, this condition is not the first time this has happened. The decline in the capital market had occurred in 1998. At that time there was a financial crisis with inflation reaching 58%. Then in 2008 there was a crisis triggered by the sub-prime mortgage scandal in the United States.
The market uncertainty does not know when it will end and it gets better. Well, here are the tips you need to do when the stock price drops
Wait for the panic to end
When the stock market goes down what often happens is panic selling. Even if stocks fall below their usual price, be careful about “scooping” the stock! It’s better to wait patiently until the panic is over and the stock price stabilizes.
Keep Your Shares
Especially if you already own big cap stocks or blue chips, which are large market cap stocks with good fundamentals.
Big cap stocks can still be stored first because usually this type of stock rebounds the fastest after the JCI decline.
Always Hold Liquid Funds
Make sure you have liquid funds that can be used for your daily needs. Like preparing an umbrella before it rains, you also have to wisely manage your investment. Make sure your cash flow is not interrupted if there are undesirable conditions that occur in the market.
Stock market conditions are not always good, but that doesn’t mean you should give up becoming a stock investor.
So, those are 3 things that traders should do when stock prices drop. Good Luck, fellas!