Surviving the Market Crash: Why Staying the Course Beats Panic Selling in Today's Economy
Hey everyone, it feels like we’re hitting some serious turbulence lately, doesn't it? Both the US stock market and the Korean KOSPI index have been taking a steep dive. If you look at the CNN Fear and Greed Index, we are officially deep into the "Fear" territory. With all the chatter about an AI bubble bursting, it seems like collective panic is starting to set in among retail investors.
I’ve been around long enough to see the dot-com crash in 2000 and the subprime mortgage crisis in 2008.
From my perspective, it still feels a bit too early to call this a full-blown bubble burst.
Historically, a real systemic financial crisis usually kicks off about 10 months after the first news of a major drop, right when the stress becomes too much for everyday investors and they start panic selling.
Professor Kim Young-ik from Hanyang University predicted about three months ago that the Fed might hike interest rates once in the second half of the year, leading to a significant stock market drop. He expects things to slowly recover as the Fed lowers rates around 2027. It makes sense, right? There’s a limit to how long the US economy can grow on endless debt, especially when profitability is still weak for Neo-cloud companies and those building their own models like Anthropic.
So, how should we handle this kind of crash? I highly recommend checking out a Q&A session on YouTube from the 2018 Bogleheads conference where someone asked John Bogle this exact question. His advice was simple but powerful: "Stay the course." Keep buying the entire US market through VTI with steady monthly investments, and balance it out by keeping BND (US aggregate bonds) at a 50% ratio.
Right now, VTI is dropping, and BND is also down due to rising base rates.
This means it's a fantastic opportunity to adjust the ratio of your newly injected cash and buy more of both at a discount. It’s basically a clearance sale for quality assets!
I’ve put together some links that go deeper into these strategies. Check them out and build your retirement assets according to your own comfortable ratios.
Simulate your own investment compounding to see how staying the course pays off in the long run.
https://bomspring.com/invest-calculator/
Learn about the proposed Clarity Act and how it might impact decentralized platforms like Hive.
https://bomspring.com/clarity-act-hive/
Read about a fix for STRL and what it means for your crypto portfolio.
https://bomspring.com/strl-fix/
Understand the global economic trends every portfolio investor needs to know to protect their retirement funds safely.
https://bomspring.com/global-economic-trends-that-portfolio-investors-must-know-and-asset-allocation-know-how-to-safely-protect-your-retirement-funds/
Find out how to easily buy Korean stock ETFs using Interactive Brokers (IBKR).
https://bomspring.com/ibkr-how-to-buy-korean-stock-etf/
Discover strategies to limit your Maximum Drawdown (MDD) to under 15% for a safer retirement portfolio.
https://bomspring.com/how-to-limit-max-draw-down-mdd-15-for-retirement-portfolio/
Check out the backtest results showing exactly how to rebalance during a market crash to defend your assets.
https://bomspring.com/how-to-rebalance-in-the-market-crash-backtest-result/