3 steps to take in a market crash

For many investors, the recent volatility has led to a tremendous amount of angst about their portfolios and their associated risk. In a great study published in December 2014, the authors analyzed investor performance during and after market crashes from 1987 to 2008. Similar to de Bondt’s and Thaler’s research in 1985, stocks that saw price drops in a crash greater than the general markets tended to see higher gains than the general markets post crash. This overreaction is what many sports players know as “pressing,” or the problem of trying too hard after a period of poor performance. Investors were selling for too little and buying too high based on emotion alone. Here are three steps you can follow in times like this: 1) go back and check your fundamentals; 2) pay attention to what's important, not what's loudest; 3) invert the trend driving the market. Read the full story: (VIEW LINK)