“Be greedy when others are fearful and be fearful when others are greedy”. These words are that of Warren Buffet. Have you witnessed a market crash, well you might have not witnessed the previous market crashes but the market crash of 2020 is surely one everyone saw. The market went from a very high green to a down crash with bleeds of red. This year’s economic downtime was really the definition of deep, and just like any other downtime, people lose their jobs, got retrenched, companies went bankrupt and so on.
At this point, people are scared, they start to hoard money and limit spending, financial speculators start to speculate on their thoughts on why the market crashed and how it would affect the economy in the nearest future. Everything falls when there is a recession and this is when the phrase Be greedy when others are fearful and be fearful when others are greedy become valuable.
The GDP of a country is determined by how much is being exchanged within a particular period in a country. A country doesn’t declare a recession until there is a downfall in the GDP of the country for 6 consecutive months (like we know, the coronavirus pandemic took a first hit on the world for more than 6 months which immediately reduced the GDP of so many countries around the world leading to a global recession). It is true that nobody can predict when there will be a market crash and that is why nobody can determine when there will be a recession in a country but also, like a lot of people in the investing world will say, the market will always bounce back to its normal position provided there are still humans investing.
Investing should be an all-time thing but it is advisable to start pulling out a few bucks for downtimes during an economic boom. At the time when there are a lot of people willing to spend money like crazy, you should start saving up for a crash. Although you cannot predict the time, but be assured that there will surely be a crash in the market. At this time, be ready to buy when you see bleedings in the stock market. Never go into debt before a recession, try to sort all of this when the market is going well and be sure to have a good credit score because when there is a downtime, there are always a lot of free money going out in forms of loans and bailouts.