3 Tips I Follow During a Downturn in the Market

Today’s video focuses on tips and tricks I follow as a long-term investor when stock prices go down and volatility remains high. Here are some highlights from the video.

Understand that investment portfolios are not all built the same. Mega-cap technology companies like Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), and Amazon (NASDAQ:AMZN) have dropped by only single-digit percentage points from their all-time highs. Then you have high-growth stock portfolios with companies like Sea Limited (NYSE:SE), Teladoc (NYSE:TDOC), Palantir (NYSE:PLTR), and Unity Software (NYSE:U), which have all dropped between 25% and 65% their from all-time highs.
Remember that the dip in prices can continue and last longer than anyone expects. For that reason, if I tend to buy the dip, I do it via a dollar-cost-averaging method. This protects me from getting too emotional if I accidentally bought in the early innings of the plunge.
I try to find ways to increase the amount of money I can invest during these volatile times. There are two ways to do this: by decreasing expenses and by increasing earnings.

Click the video below for my full thoughts and analysis.

*Stock prices used were the pre-market prices of Dec. 2, 2021. The video was published on Dec. 2, 2021.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Jose Najarro owns shares of Microsoft, Nvidia, Sea Limited, Teladoc Health, and Unity Software Inc. The Motley Fool owns shares of and recommends Amazon, Apple, Microsoft, Nvidia, Palantir Technologies Inc., Sea Limited, Teladoc Health, and Unity Software Inc. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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