3 Little-Known Facts to Get Over the Fear of Losing All Your Money in the Stock Market

Fear of Losing Money in Stock Market

But what if I lose all my money?!?? I don’t know how many times I’ve heard that question. People have this huge fear of losing all of their money if they invest in the stock market.

Let me help you overcome that fear with 3 little-known facts.

1-Accept That The Market Will Crash

Accepting the fact that the market will crash helps you know what to do during the crash. The market crashes about every 8 years, but then always goes back up.

Dow Jones Stock Market Graph

As you can see in the graph above, the stock market does crash or dip down, but it always goes back up. It has an upward trend.

If you aren’t expecting the market to crash, you’re much more likely to freak out and do something rash when it does.

If you are already expecting it, you’ll be able to take the steps to take advantage of the crash.

It’s like preparing to be heart broken. We’ve all dated someone that we were so into, but he just wasn’t into us and we ended up getting our heart broken.

If we accept the fact that our heart will be broken, we can know what steps to take to move on. Instead of stalking him, or slashing his tires, or giving the evil eye to his new girlfriend, we can eat some ice cream with our roommate, go to the batting cages and take the lessons we learned from that relationship and use them for the next relationship.

Just by accepting the fact the market will crash, we can hold onto our investments (don’t relate this part to dating, we don’t want to continue to hold onto someone that doesn’t love us the same way…way too painful and such a waste of time…) through the crash.

2-You’ll Be Able to Recoup Your Losses Quickly

The second fact is to know you’ll be able to recoup your losses pretty quickly by leaving those investments right where they are.

Just like we’ll get over our heart break, especially when that new great guy shows up, we’ll get over the crash because the market always goes back.

Let’s take a look at how long it would take to recover (recoup your losses) when the stock market drops or crashes.

How Long to Recover from Stock Market CrashSource: http://www.flannelguyroi.com/thoughts-timing-stock-market/


If the market drops 10%, it would take about 6 months to recoup our losses.

If it drops 50%, we can expect to get our money back in about 2.3 years.

If it drops a whopping 90%, on average it would take just over 4 years to recoup our losses.

Now if we are comparing the money you’ve earned against how quickly it goes back up, it really doesn’t take that long to recover.

Plus, you never really lose “all” of your money. It will dip down, but it’s not like you’re going into the negative or all the way to $0.

So if you are retired during the time the market crashes, just realize you may need to cut back on expenses for that 2 – 4 years. It’s not like your money all disappeared, so just don’t plan to take your huge round the world trip that year, but you can still live well.

3-It’s a Great Time to go Shopping

This is my favorite fact about stock market crashes.

When a stock market crash happens this means everything is on SALE!!! Time to go shopping!!

If you already have your investment accounts set up and know what you are looking for, bam! You’ll be able to take advantage of the stock market sale!! Who doesn’t love a good sale?! Especially one that MAKES YOU MONEY!!!

It’s not like you’re buying something you won’t really use later or something that will go out of style or break down on you; you’re buying things that will make you more money (who doesn’t like more money?!).

Recap

Alright, so what did we learn today?

1st Fact – Know that the stock market will crash. When it does, just leave your money in your investments.

2nd Fact – Know you’ll be able to recoup your losses pretty quickly. If you’re retired, be more conscious of your spending during the crash.

3rd Fact – Stock up during the stock market crash. Everything is on sale, so make sure to buy and not sell during the crash.

What do you think? Perhaps the stock market crashing won’t make you lose all your money after-all.

Remain calm. Know that the stock market will crash and stock up when it does.

Comment below with what stock you’d like buy first!

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