Tip #11 - How to handle a share market downturn

Every week we post a tip that we hope will help you become a successful share market investor.

Tip# 11 -- How to handle a share market downturn

If the share market crashes there are two important rules to follow. Rule 1. DON’T PANIC. Rule 2. If you do panic, refer to Rule 1.

You know in advance downturns will happen from time to time just as you know that in the long run shares are likely to give you the best return – see Tip #1.

If the share market takes a tumble you have made a paper loss; not a real one. Ask yourself if you know a better place (under the bed?) to put your money than in the share market – especially when it is at low point! As long as you don’t bail out you won’t crystallise a loss and you are guaranteed to participate 100% in the inevitable bounce back! See here for other points to ponder before you sell out of the share market.

This information is not a recommendation nor a statement of opinion. You should consult an independent financial adviser before making any decisions with respect to your shares in relation to the information that is presented in this article.

FURTHER READING

• Blog -- Tip #10 - How well your share portfolio is performing?
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• Blog -- Does your investment portfolio match your appetite for risk?