The stock market is down nearly 20% for the year.
If you’re a smart investor, you’re letting everything ride just as you did when the market ballooned over the last couple of years. Bear markets are when wealth is generated.
Consider this: Most bear markets (a bear market is when prices fall by at least 20% from their highs) last around 9 to 10 months, start to finish.
During these months, calm investors who understand the historically-proven nature of the stock market sink more money into the market. When the market inevitably rebounds, their net worth soars higher than it was before the bears took up residence.
Investors only lose money when they sell. If you sell during a down market, you’ll lose money.
If you can’t hang in there for 10 months, you’re not a long-term investor. Unfortunately for these people, long-term investors are the ones who build considerable wealth over the course of a lifetime. Short-term investors (and day traders) tend to lose it.
Bear markets are wealth generators
Bear and bull markets are 100% natural. They happen all the time, and it’s a healthy part of what makes the stock market a lucrative cash cow for those who understand it.
The market will go up as it did (insanely, I might add) over the last couple of years. Then, it’ll go back down again. Then back up.
Investing in the stock market isn’t rocket science, but requires a skill that seems more elusive than mastery of rocket math: patience.
Play your cards right and you stand to make a LOT of money during bear markets. The only requirement is patience. It’s fun to invest when the market’s up. Not so fun when it’s down.
But, investing in a down market is how real wealth is made. That’s because you’re buying stocks at a discounted price. When the price of those stocks goes back up, you get richer.
It’s a beautiful system. All you gotta do is let it work without going crazy.
Here’s what to do:
- Keep a 6-month emergency fund to help you sleep at night.
- Don’t touch your investments as much as you can when the market is down.
- Ignore the doom-and-gloom predictions because it’s all bullshit.
- When the market inevitably rebounds, live large.
You exploit the magic of the market essentially by doing nothing more than letting your investments ride in a market that’s historically proven to make people filthy rich.
Literally, that’s it.