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How to Stay Calm During a Stock Market Crash

How to Stay Calm During a Stock Market Crash

Market crashes can be scary, but they do not always have to be. Learn how to remain calm when the market falls here.

Remaining calm during a stock market crash or correction is something that I really believe if you can do it well, it is going to protect your investments and ultimately help you feel better during these kind of times of turmoil.

When I first got into investing, I had people whispering into my ear making me question whether or not making investments was a good idea. This was because of things like the stock market crashes that can happen suddenly, or the random corrections that occur. I knew that it can be challenging to see your portfolio dip 10-15% or sometimes even more than that, so before I started I knew that investing has a lot of uncertainty involved in it.

At the time of writing this article, the past few days in the stock market have definitely had a lot of uncertainty and that might be why you are reading this now. On the other hand, you might be anticipating a moment like this that is about to happen, so let’s begin by talking about the things that you can control – your behavior and your mindset.

The very first thing you should do to stay calm during a stock market crash or correction is you must not get emotional. I have learned these lessons the hard way and I have talked to many people who have as well. I have realized that when I have gotten emotional, I’ve made bad investment decisions. It is critical that you have to be able to understand the emotions that you feel and recognize that they do not need to influence your behaviour. This is especially important when it comes to investing your hard-earned money in the stock market. Being able to separate your emotions from your investment plan is a huge barrier to success for many, so prioritize that. Stick to the plan that you developed when you started investing because there was a reason you had this plan and it was for times like these.

The second thing you should do has brought me a lot of success as an investor and that is to view these dips as buying opportunities. This has been something that has really led to my long term success in investing because by buying during these dips or these crashes has really allowed me to establish a better position in the stocks, companies, and the projects that I truly love and value. An example would be, let’s say we bought stock X for five hundred dollars. Something happens and it crashed down to $250. That allows me to go ahead and buy the stock as long as the fundamentals and future projections are good. I love these moments because I am getting companies and projects that I believe in at a highly discounted price! So I challenge you to view these crashes and dips as buying opportunities. This has been one of the biggest points to me being successful during my investment journey, so I always like to kind of have a little bit of cash on hand. Recently I had about 20% of my portfolio in cash because I kind of felt uncertain where the markets were going. Over the past few days this has allowed me to take advantage of these tremendous buying opportunities which set me up for success moving forward.

The third thing you should do is take the time to research during these times of uncertainty. Research the companies and projects that you do want to get involved in and while you’re doing that, set your buying target. If you want to buy stock X at two hundred and seventy five dollars so you can create an order. If it dips down to that price, you are able to buy it and take advantage of those lower prices. This will prevent you from buying or selling a stock from F.O.M.O. “fear of missing out”. When people make decisions like that, oftentimes it is irrational and that is not going to lead to your long term success. Finding good companies at the prices you think they are valued at can make great investments moving forward. Doing this is going to be a big piece of your success.

The fourth thing you should do is going to help you stay calm and it’s going to help you become a better investor when you prioritize moving your body. It relieves stress and puts you into an optimal space to make better investments and be at your best when those opportunities come. When so many things are happening around you, you need to be able to focus in on what matters and execute and make good decisions. Because you move your body, because you do hard things, because you develop your mindset you are going to become a better investor simply by waking up and moving your body. I like to do it to start my day because it primes and optimizes my body moving forward and I really believe my investing life and money life is better, but my life as a whole is better.

I trust that these four steps help you stay calm during the next market crash or correction that comes our way and allows you to take advantage of the great buying opportunities. Watch the full video on YouTube here.


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Teacher and creator of Greatness Every Day. Matt lives in Sackville, NB, Canada and loves spending his time outdoors, racing triathlon, and learning.


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