Q

What should I do if the market crashes?

A

Do what the experts do: nothing.

If you happen to have investments in stocks — say, with Wealthsimple — and the market crashes, we advise the strategy advocated by all the wisest financial gurus alive: do nothing. Trying to time entrances and exits to the market has been shown over and over again to be a fool’s game.

If you don’t have any money invested in the market and it takes a significant dive south, today is Black Friday for you, my friend — now is a great time to enjoy some bargains and start investing. How might you start to do such a thing? One way is to take whatever money you have available for investment and put it all into a mix of low-fee, highly appealing market hugging ETF offered by an amazing, friendly, highly convenient investment firm like, say, Wealthsimple. Studies have shown that investing a lump sum immediately is the preferable way to see the biggest long-term gains.

If you’re a bit freaked out that the market has yet to hit its low, another strategy to consider is called dollar cost averaging — that is, dividing a larger sum of money into equal smaller parts and investing them at regular intervals. An amazing, friendly, highly convenient investment firm like, say, Wealthsimple, would be more than happy to set up an automatic investment program that makes sense for you. Beginning investors find making regular deposits regardless of what the market is doing particularly comforting, since you’ll be purchasing equities at an average price, not when they’re priced too high. With this method, naturally, you’ll be running the risk of missing out on bargains, but the psychological feeling of wellbeing might be well worth it to you.

Wealthsimple is investing on autopilot

Get started in just 5 minutes, and your first $5,000 is managed free.

Learn more