Shares/Stock What Should Investors Do When The Stock Market Crashes?

[Good-Guy]

Investing money in stock market is one of the most crucial ways many people use to make money. There are many people who enter the stock market with the intention of making money, but they quite the market due to the fact that suffer from huge loss. Investing money in cryptocurrency market or stock market is very risky. This is because one of the most important aspects of these markets is the fact that they could crash at any time or fluctuate in a massive way. This is why even the best trading strategy could fail miserable and no strategy could be classified as "fool proof" way to make money.

Most of the time an investor could do nothing to prevent the losses. The only thing they could do is withdraw investments once the market starts crashing in order to prevent further losses. I think there are many brokers and stock dealers in the market who regularly monitor the market and when they see that the market is crashing, they tend to withdraw capital immediately. I think this is what many cryptocurrency traders do. So what should an investor do when the stock market crashes in a really bad manner?

 

[Suba]

Market crashes occur not only in stocks but almost all commodities including cryptocurrencies, so as a reliable investor of course you don't have to panic and immediately sell all your shares for fear of the next decline. Of course, at the beginning of investing in stocks, you have calculated the risk tolerance value. If you are patient and wait, the market conditions will gradually improve and prices will return to normal.

 

[Alexandoy]

The crash in the stock market is very similar to a bank run. When there is a spate of big withdrawals and the public would learn about it then there would be a bank run - the continuous withdrawal of deposited money due to fear of bankruptcy. Usually the central bank or other banks would lend money to the victim bank to appease the clients. When the bank has no money then the issue will be blown up. Having cash in front will greatly help to dissipate the issue of a bank run.

In stocks, when there is an impending crash investors tend to sell their holdings. However, rumors in stock exchange fly so fast that holders would instantly sell while the price is still manageable. But when the price gets very low then the sellers would stop selling. In my case, I had my stocks at 128 per share. If there will be a crash at 100 per share I would probably not sell because my stocks is of the biggest bank here and I believe that it can easily rebound to the normal price.