How to stay calm when markets are dropping: A roundup of expert advice


Watching the market swing is never easy — and there's been plenty of action for investors to watch in recent weeks amid fears over how the coronavirus outbreak could affect the global economy.  

February was the second-worst month for the market since the financial crisis, and the last week of the month was also the market's worst since 2008. The first week of March hasn't provided any calm, either, with stocks alternating between dramatic drops and equally dramatic rallies from day to day.

Luckily, experts say, you can feel free to look away and focus on taking the long view.

"You don't buy or sell your business based on today's headlines," legendary investor Warren Buffett said recently in an interview with CNBC. The coronavirus "is scary stuff," he said, but added, "I don't think it should affect what you do with stocks."

No matter what's temporarily rattling the markets, it's a good idea to do your best to keep saving and investing, Jason Lambert, the president and CEO of Northwest Financial & Tax Solutions, near Portland, Oregon, told Grow last fall. "Stick to your plan," Lambert says. "You can weather the storm."

These Grow resources can help you understand what's going on in the market, and how you can make the most of it:

Why it's actually good for you that the US stock market has gotten less calm

Market ups and down are normal. In fact, daily swings in excess of 1% have happened on about 27% of trading days in the past 20 years, according to FactSet data analyzed by Grow. And they can be a great opportunity for long-term investors to buy at lower prices.

Why you shouldn't panic when markets are bumpy

Video by Stephen Parkhurst

Warren Buffett: The long-term success of US stocks is 'very easy to predict'

Warren Buffett recently told CNBC that he doesn't think "there's any way to predict" what the market will do in the coming weeks or months. But he's confident in the long-term outlook. "I can come to a pretty firm conclusion that 20 or 30 years from now, American business — and probably all over the world — will be far better than it is now," Buffett said. With that in mind, he says, investors should embrace the buying opportunities that come from lower prices.

Why a stock market 'sell-off' doesn't mean you should sell

Resist the urge to sell during periods when the market and stock prices are falling.

"Long-term investors with the ability and fortitude to remain in the market should do just that," says Mark Hamrick, a senior economic analyst at Bankrate. "This is for certain: One locks in a loss by selling."

What to do with your 401(k) when the stock market gets bumpy

"If you're under 60, the universe just gave you a gift this week. Use it," Josh Brown, CEO of investment advisory firm Ritholtz Wealth Management, recently said on Twitter.

When it comes to your retirement accounts, making some smart moves now, along with creating a plan for when the market gets bumpy, can help calm your nerves and set you up for success.

The difference between a bear market, a recession, and a correction

Video by Courtney Stith

The upside of downturns: Why now is a great time to start investing

If you're new to investing, getting started can feel daunting given recent market news. But experts say now is actually a great time to begin investing.

"The stock market is running a sale thanks to coronavirus, and people are able to get in at ... much better pricing than they were 30 days ago," says certified financial planner Mark La Spisa, president of Vermillion Financial Advisors in South Barrington, Illinois.

Here's how quickly the stock market recovered after similar downturns

Even at its worst, a bear market, the stock market has always bounced back. And despite the recent slump, the market is still up dramatically over the past 10 years. Experts say that's why it's important to keep a long-term perspective when investing.

Before you invest in gold, here's what you need to know about precious metals and your portfolio

Gold is generally seen as a safe-haven investment: Prices tend to increase when investor demand spikes during times of geopolitical or economic uncertainty. And prices have been on the rise since November, with recent spikes over coronavirus fears. Here's what you need to know about investing in gold.

Why investing in gold isn't as safe as it may seem

Video by David Fang

The president's chief economic counsel said people should invest in the market — here's why that's smart

"To me, if you are an investor out there and you have a long-term point of view, I would suggest very seriously taking a look at a stock market that is a lot cheaper than it was a week or two ago," National Economic Council Director Larry Kudlow recently told CNBC.

Here's why he and other experts recommend staying the course with your investment contributions, and taking advantage of lower prices to get more for your money.

What you need to know about a stock market correction

When the market gets bumpy, you might hear terms like "correction," "bear market," and "market crash" bandied about. Here's what those words mean, what happens during a correction, and how to prepare to manage its effect on your investments.   

How to take advantage of the Fed's surprise interest rate cut, the biggest since 2008

Responding to coronavirus fears, the Federal Reserve recently announced a surprise rate cut as a proactive measure to calm the markets. The cut of half a percentage point, or 50 basis points, is the largest since the 2008 financial crisis. As a consumer, you can make the most of falling interest rates.  

More from Grow: