Maybe there will be a bigger stock market crash in the future, but since I can't predict when the stock market crash will happen, and as far as I know, other investment experts who participated in Barron's investment round table can't predict it, why should we assume that each of us can prepare in advance to avoid the stock market crash?
In the 40 stock market crashes in the past 70 years, even if I predicted 39 times in advance and sold all the stocks before the stock market crash, I would regret it in the end. Because even in the biggest stock market crash, the stock price eventually rebounded and rose even higher.
There is nothing strange about the stock market falling. This kind of thing always happens again and again, just like winter in Minnesota comes again and again, but it's just a very common thing. If you live in a cold climate, you have long been used to it, and you predicted in advance that when the air drops to freezing point, then when the outdoor temperature drops below zero, you will definitely not panic that the next ice age is coming. And you will put on a leather coat, sprinkle some salt on the sidewalk to prevent freezing, and everything will be settled. You will comfort yourself that if winter comes, can summer be far behind? It will warm up again then!
Successful stock pickers are to the stock market decline what Minnesota residents are to the cold weather. You know that the stock market crash will always happen, and you are ready to survive it. If you are optimistic about falling with other stocks, seize the opportunity to buy more while it is low.
After the crash of 1987, the Dow Jones index once fell by 508 points in one day. Those investment experts predicted with one voice that the stock market would crash, but it turned out that although the Dow Jones index plunged as much as 1000 points (down as much as 33% from its peak in August), the end of the stock market did not come as scheduled. This is just a normal stock market adjustment. Although the adjustment is large, it is only the latest adjustment in the 20th century 13 stock market, with a drop of over 33%.
Since then, although there has been another stock market crash with a decline of more than 10%, it is only 4 1 times in history, or in other words, even the stock market crash with a decline of more than 33% is only 14 times in history, so there is nothing to make a fuss about. In the annual report of Magellan Fund, I often remind investors that this kind of stock market correction is inevitable and will always happen, so don't panic.