How to Profit from Panic in the Markets
Let’s look at how to profit from the panic because when people are scared it is a good time to be greedy.
And when people are greedy it is a good time to be scared.
This is from Warren Buffett’s philosophy and has serviced me well as it can for you.
Do you remember the dot com bubble in 2001 or the financial crises in the United States in 2008 and 2009?
Most investors fail and lose their hard earned money during such crises.
They fail simply because they were affected by their emotion.
They were too greedy for the profits they had made.
You know when the stock price kept going higher and higher in 2007 they believed that it would keep going up forever.
So when the price reached too high they would start getting scared about holding their investments and they tended to sell the stocks to get out of the market.
When the investors sold their stocks, the stock prices decline and that made people start panicking.
And as you can probably notice a knock of effect is started to appear here…
As when a large number of investors sold their stocks at the same time that made the stock price dramatically drop. This keeps on going because as more people sell, it causes more fear, which causes more selling all the way to the bottom.
And finally the market crashed and of course most investors lost their money.
While many people were suffering, smart investors saw the greatest opportunity for making a huge profit from the stock market.
While others were selling their stocks the smart investors tended to buy more stocks at a very low price after the recession.
The market recovered itself and these investors made a big fortune in just several months.
Here’s the profitable experience that you can take advantage of to make a huge profit from the incoming opportunity.
When the stock market crashed, it not only recovered its previous highs but also made substantial gains in the next few years.
So after the market crashes, and when it starts recovering, this will be the greatest time to get into the market.
We can buy at a very low prices and when the market recovers we can make a sweet profit in just a short term period.
So how about if you’re late to get out of the market before it’s crashed?
If the market’s already crashed instead of panicking and selling your stocks, you should keep holding until the market recovers itself.
Don’t worry if the price keeps declining because you’ve learned that the stock market will keep going up in the long term.
So you just need to have enough patience to wait for it to grow.
Instead of selling the stocks you should buy more stocks at a lower price and when the market goes up again you can enjoy the profits.