What goes up must come down. Although Newton didn’t say those words exactly, it relates to his third law of motion, which states, “For every action there is an equal and opposite reaction.”
Over the last decade, the stock market has seen record highs. However, you probably heard that the market was going to crash. During the last month, the market has served up plenty of volatility! You’ve seen some of the second half of that “what goes up must come down” adage.
How Can You Benefit?
An article written by Joshua Kennon in The Balance, says this is “a time when fortunes are made.” He offers a formula for success, which he claims “hasn’t changed in the past couple of centuries, and it seems unlikely to change in the future. Here are five rules for making money during a stock market crash.
- Buy into good businesses. Buy shares of good businesses that generate real profits, have low-to-moderate debt-to-equity ratios, and have at least some franchise value, among a few other things.
- Follow a formula. You’re never going to be able to time the market, so stick to a routine.
- Reinvest your dividends. Reinvested dividends are a huge component of the overall wealth of those who made their fortunes investing in the market.
- Watch out for fees. Money is automatically deducted from mutual funds so you never see all the fees. See How to Stop Losing Money in Your Investment Account to learn more.
- Have a backup plan. One of the most important things you can do to cut your risk is to create a backup plan. You can have a more enjoyable life if you’re not dependent on your next paycheck. Live off your day job but build a cash generator that can be used to build your investment portfolio.”
Keep Your Money Safe
Another recent article posted on Make It talked about money making opportunities in uncertain times. It quotes Lorna Tan from Singapore’s multinational bank, DBS saying, “periods of volatility can be a good time to enter the stock market and gauge your risk tolerance. However, she added that it’s not for the fainthearted and recommended following four key pillars.
- Invest for the long-term. Have three-to-six months’ salary saved in cash for a rainy day. Any money you invest in the market should be locked away for long-term goals.
- Contribute gradually. Invest a fixed amount into the same investment product over a long-term period. Then you can buy more units when the cost is low and less when the price is high. (Dollar-cost averaging.)
- Take advantage of compound interest. Time in the market is more important than timing in the market. You can earn interest on interest received if you stick to a disciplined investing plan.
- Diversify, diversify, diversify. A report at StashAway showed that people who invested consistently during corrections and when markets broke performed even better than those who withdrew during corrections and did nothing during break-even periods.
Put It All Together
What if there was an easy-to-do way to put all of the above suggestions together? And what if you could do it all on the best stock market app for android or iPhone?
At iFlip, you can! Using the best algorithmic trading software, you can protect and grow your wealth in a system designed for long-term investing, with managed risk and without confusing fees.
Several portfolios are available allowing you to buy into several good businesses. The algorithmic trading software performs a daily analysis to determine what stocks should be held, bought or sold. So, your risk is limited.
You create wealth over time. You can contribute gradually. With your earnings reinvested, you can take advantage of the benefits of sticking to a disciplined investing plan.
To make investing even easier, iFlip offers the best mobile stock app. With this mobile trading app, the algorithms can trade for you. No experience needed. iFlip can be your backup plan.
The market is experiencing a correction right now. iFlip isn’t designed to beat the market every year. No one can do that! You’ll have an edge with the powerful mathematical tools in the best stock market app for android, using iFlip’s automated trading software.
Maybe Newton’s law applies to both directions and soon the market will retrace. “For every action there is an equal and opposite reaction.” Either way, hop over to iFlip and see how they can help you grow and protect your wealth.