Financial markets are crashing, what should I do?
If you have a share portfolio, you might not be sleeping very well as you watch billions disappear from the Australian Stock Exchange (ASX).
You don’t know where the market is going next, so your very tempted to jump ship!
The truth is, no one knows where the market is going, but assuming your investment portfolio has strong diversified fundamentals, your best move is to do nothing.
Whatever you do, don’t panic!
Markets go up and down. If your fundamentals are sound, selling everything when the market panics is a sure way to lose a lot of money.
Keep your seatbelt on, do nothing, and keep receiving your dividends.
No one knows if or when the market will crash or by how much, but we know that a diversified portfolio held over many years will average about 10 per cent return annually over the long term, despite ups and downs in the market.
Australia shares have returned 9.7% over the last 30 years despite two stock market crashes.