5 Moves to Make if the Stock Market Plummets Monday | Personal Finance
So, before anything else, take a couple of deep breaths. It’s just temporary weakness.
2. Shed your shakiest holdings
Assuming you’ve successfully calmed your nerves with a few deep breaths, now let’s get serious about pruning your picks. Certainly some of them are keepers regardless of the environment — mainstays like Microsoft (NASDAQ: (MSFT)) and Walmart (NYSE: WMT). If you’re like most investors, though, you may have also picked up some more speculative picks like GameStop ((NYSE: GM)E). A sweeping sell-off will put pressure on nearly all stocks regardless of their caliber. A major pullback, however, can really upend names that are of lesser quality. The trick is being honest with yourself about why you own each stock you own.
3. Dust off your watch list and make an entry plan
It’s seemingly two different steps, but it’s really just one.
Any single-day plummet that kicks off a more prolonged sell-off is ultimately a buying opportunity, but you don’t necessarily want to start your search during the plunge’s most harrowing days. You should always keep a list of prospective buys handy if and when their prices turn attractive enough, but that price should be pre-determined before the pullback plays out. Sure, you may not be stepping in at the stock’s exact bottom, but as the saying goes, don’t be penny wise and pound foolish.