It is possible to make money in even the largest stock disaster. Many would argue that it isn’t possible. Admittedly, it is hard. It is also not all that common. Investors are making money in down economies and in tough times because they are savvy, focused, and constantly applying some significant strategies.
Any substantial shift in the stock market is called a market correction. It is the stock’s answer to the status quo. It is when predictions become more reliable and the programs are used long records to determine how the stocks are likely to perform. The market often self-corrects to this standard, but that will take some time. Market corrections also refer to temporary price declines that can fade away quickly. The issue is to determine when they will happen, for how long, and what is going to be done about it.
During the correction, many investors will freeze. They pull their funds and let them sit, waiting for the market to correct and stabilize once again. This is the safe move. It may also be a painfully drab one. The earnings will be modest, at best, and the investor is losing out on some fresh and fascinating opportunities.
There is an urge to run and hide funds during a correction, and a fair argument can be made for why this works. Experienced investors know that this is the best time to buy. A market sell-off will drive the price to record lows. Now there is a distinct upward bias. Even the best investment companies will see how a bull market and correction will play out. They are not concerned about these shifts because they are natural.
In many ways, investors profit off of individuals that run and hide. They pull their money out in fear of losing it all. That drives their value down even further, and an investor jumps on board at a fraction of the prior “stable” stock price. So when the investors that initially pulled out begin to buy in again, the investor who capitalized at the right time is reaping massive rewards. That is the essence of the bull market. It is also the essence of a qualified and smart investor.