Sure, a market crash can be unsettling, at a minimum. At a maximum, it can have you hyperventilating and preparing to sell all your holdings. That’s generally not advisable, though.
Here are three reasons why you shouldn’t worry about a stock market correction or crash. (Note that a correction is generally an overall decline of between 10% and 20%, while a crash is one of 20% or more.)
1. Corrections and crashes happen fairly frequently
Stock market declines are inevitable. Research from Schwab shows an intrayear decline of at least 10% happening in 11 of the 20 years from 2000 to 2019 –roughly every other year, on average. Bigger declines happen, too, but less frequently.
Stock market declines are also unavoidable, unless you plan to sit on the sidelines to miss them, in which case you’ll likely miss bull markets, too. After all, no one knows exactly when the market will crash…