Your Homework Before the Next Market Correction
The worst thing you could do right now during this market correction is panic.
If you’re an experienced investor, you know that the markets will find their support. The free fall can’t last forever.
But if you’re a novice investor, let this be a learning experience.
We’re witnessing history.
Bloodbaths happen… but the market always recovers. Farther down the road, this will be a blip in the rearview mirror.
As our experts have been saying for weeks, a down market is an opportunity to go bargain hunting. To pick up shares of great companies at even greater discounts.
That said, there’s one imperative move you must make before the next crash… or run-up.
But first, some background information.
Robinhood Goes Dark During the Market Correction
On Monday, March 2 – and then again on Monday, March 9 – the popular online trading platform Robinhood experienced a systemwide outage.
Part of the cause of the downtime was “stress on [the] infrastructure – which struggled with unprecedented load.”
But it gets more interesting…
“Multiple factors contributed to the unprecedented load that ultimately led to the outages,” the co-founders wrote in a statement. “The factors included, among others, highly volatile and historic market conditions; record volume; and record account sign-ups.”
Record volume makes sense. Traders were piling in by the thousands to either take their gains and run… or snag their share of inverse funds and volatility plays.
But record sign-ups?
That’s where the newbies went wrong.
Bitcoin’s Warning
Let’s look at another platform crash for a moment.
On December 7, 2017, the cryptocurrency trading platform Coinbase experienced a similar outage.
Coinbase hit the No. 1 spot for free apps on Apple’s App Store. So many people were trying to buy bitcoin that the system simply crashed.
The following day, CEO Brian Armstrong explained that access to the website “may become degraded or unavailable during times of significant volatility or volume.”
It happened again a few days later when Coinbase had to temporarily disable buying or selling litecoin and ethereum during a historic price surge.
The system simply couldn’t bear the weight of so much interest.
Don’t Wait Another Minute
The lessons learned in December 2017 and March 2020 are identical…
Don’t wait for the run-up or the crash to get into the market.
Because then you’re just overreacting to the news cycle like every other Chicken Little.
Setting up a trading account can take a few hours, if not a few days. Sometimes you’re stuck waiting for your bank to verify and approve account access. And if it’s true mania – as was the case in 2017 – the platform may stop allowing new sign-ups altogether.
So if you’re trying to make quick money in that very moment when the Dow is down 2,000 points… well, you’re going to be out of luck.
If there’s a possibility that you’ll want to profit on upcoming volatility, you should already have market exposure. That way, you’ll be ready for whatever hits next.
But if you don’t have an online trading account set up and ready to use, don’t be surprised when you miss out on all the fun.
For some helpful information on how to start trading during this market correction, click here. And to check out the top five best investing apps, check this out.