A few weeks ago on December 4, 2018, investors went into a panic because the stock market took a hit. Individuals have been speculating that the reason for the drop could possibly be repercussions after the China trade negotiations or the drama-filled politics of the United States. This drop has had an effect on all levels of investments from the professional investor’s down to the apps like Stash. The key for investors is to weather the storm, remain calm, and most importantly be open to change.
Technology has improved how the stock market functions but it also has its downfalls. The computers can have glitches and disrupt a traders efficiency and lowering the worth of the overall stock market. AI or the computer algorithms are now used to help individuals to determine when to buy or sell shares of stock. AI follows previous stock market trends and uses this information to predict future trends. Since computers and smartphones are available and have the ability to access the stock market with these devices day trading has become more prevalent. Investors have to understand no matter what the situation the stock market will crash. Investors also have to realize that even if they are seasoned investors they have to continually re-educate themselves so they can be aware of any changes or new trends.
There has been a history of stock market crashes. There was a crash of 1929 and this crash had an effect on the economy until the mid-forties. Another significant stock market crash was the October 2, 1987 crash, which was known as Black Monday. One of the most recent crashes was the Y2K crash. This crash even had big effects on giants like Cisco and Amazon. To combat the stock market crashes investors should diversify their portfolio by investing in new stocks. Sandy Chin states that investing in new stocks is just a willingness to learn a new philosophy. Sandy Chin reminds people that a stock market crash is inevitable but just like anything else it can be slowed with education and new investments as a defense.