Dealing with Market Volatility in 2022

Recent weeks in the stock market have been extremely choppy and unpredictable, with the S&P 500 down almost 10% from its all time high at one point. Stocks like Paypal(PYPL) and Facebook(FB) have both fallen by about 30%. In times like these, it is a perfect opportunity to learn about how to react to an unstable market.

It’s easy to panic when seeing your gains evaporate in a matter of days, but it is important to remember that “time in the market beats timing the market“. Instead of being too eager to do anything impulsively, understand that things will eventually get better and go back to normal. Don’t believe me? Just look at a chart of the S&P 500 and zoom out. The “crash“ doesn’t look to bad anymore right? In fact, we are right on track to where we should be based on the historical gains of the S&P 500.

So what should you be doing right now? Well one way to think about it would be that many stocks are temporarily on discount right now. That doesn’t mean to randomly buy stocks that have dipped a lot though. If there is a stock you have been looking at for quite some time, or even a stock that you already own, now might be a great time to buy in! As we can see from the stock market crash due to Covid-19, once it hits a low point, it only goes back up.

If you happen to have extra money to invest, a volatile market is a great opportunity to buy into the market. It might look bleak now, but there is a high chance of profit if you just play your cards right.