From Fear to Fortune: When the Markets Tumble the Last Thing to do is to Panic

Every time I share this opinion, I get a few odd looks. But, without fail, I am eventually proven right. 

The stock market has one ultimate direction, and that direction is up.

We've all been down this road before, time and time again. The stock market frequently experiences hiccups that can momentarily crash and burn our investments. However, if we are fundamentally aligned with the businesses we're invested in, these fluctuations really don't matter, because in essence that's what we're buying into: the businesses. Not the markets.

When the markets stumble, there's always a certain panic that sets in that always feels amazingly misplaced to me. Because we've encountered these kinds of markets so many times before. It's really nothing new. Yes, it initially hurts to see our portfolio values diminish. Hey, we're human. It's going to give us pause. It might even prompt us to make some adjustments—not necessarily to our portfolios, but to our plans around them, such as holding off on certain expenditures. It may delay profit-taking or alter trades we may have had in mind.

Ultimately, however, nothing truly changes except the current bottom line. That, and something we tend to miss. Opportunity.

I've made the most money when the markets fall. In fact, it's during these downturns that many investors see their greatest profits. Those who know well enough to ride out these events and seize the opportunity to invest more in strong businesses generally come out significantly ahead in the long run because, as some say, everything goes on sale.

That's not to say that these market conditions won't have a short-term impact on businesses. But that's the key term here: short-term. When the economy pulls back or potential job losses follow, especially during inflationary times or a recession, it's natural for businesses to feel some near-term pressure on their bottom lines.

However, economies eventually stabilize and return to normal. That's when the markets, after having bottomed out, not only recover but often surpass previous highs before the next downturn occurs.

It's the reaction to these events that prompts me to write about this nearly every time it happens. The selloffs and the doomsayers running around proclaiming that the sky is falling.

The bottom line is that you don't actually lose any money if you don't sell. If the underlying business you own is fundamentally sound with a strong future despite current market or economic conditions, it will survive the crunch and there's no reason to sell.

Granted, I want to be careful not to make this all a blanket statement. It depends on what you are invested in. Some businesses may struggle more depending on the nature of their business, and in those cases, it may be worth considering taking some of the pain and cutting your losses.

But for most businesses, this isn't the case and never has been. Take companies like Coca-Cola, which has been around for over a century. How many times has it endured devastating blows to its stock value? How many times has it navigated through tough economic times, through recessions and even a Great Depression? Is Coca-Cola any less valuable an investment now than it ever was before? 

No, not at all.

In markets like this I refuse to buy—or should I say sell?—into the panic. It's not something I will ignore, mind you. I will simply work smarter to make informed choices, identifying the businesses I own that present the best opportunities for my portfolio once the dust settles.

Just look back at where the markets have been and where they are now—it's all you need to know. In 2008 and 2009, the DOW peaked around 13,000, lost over 50% of its value, dropping into the 6,000s. Today it's in the 40,000s. Even if it dips into the 30,000s, it's safe to say that ten years from now, we will likely see the DOW in the 50,000s and 60,000s.

Downturns like this simply offer a premium on top of future profits. That's really the main takeaway here and missing that point will also leave countless thousands of dollars either sitting on the table or lost forever.

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© 2025 Jim Bauer

Stock Markets Plummet, Do NOTHING!!!

Whenever the stock market is having a tough go of things I always get a kick out of the gloom and doom stories that begin to trend, and all of the wise men of the markets declaring "this is the end," "the sky is falling," and "cash it all in!" It's why I write about it so often. But what gets me more is the well known fact that, well...

We have been down this road time and time and time again.

The fact is, and remains, that the markets will move up and they will move down. And by the way, for anyone who has ever paid attention, they tend to typically go higher than where they left off before they fell when they eventually do go back up. And the markets always do go back up.

Currencies rise and fall. World markets expand and contract and shift. One day it's Japan whose the hottest growing country. Then it's China. Right now it's actually India. Consumer confidence goes up, it goes down, it goes dormant. Wages rise, wages fall. Banks are fantastic, then they are not. Same goes for auto companies, and by the way, every single company that has ever done business and every single market sector for that matter.

Tech is the doll. Then it's the financials. Then it's oil. Then it's durable goods. And then one day they aren't and something else is.

After the Crash of '29, after the recession that hit in the 80's, after Black Tuesday, and after the financial crisis of 2008, all were undeniably the worst markets to deal with obviously, but were also some of the best times to invest. Buy low, sell high might be considered old school to some in the current markets—but I think fundamentally the concept is still very much true.

And the markets are never lower than when they are down.


Wow. That's a brilliant statement, is it not? Of course I am being facetious. But more than buy low, sell high, what is really the point here is staying the course in good times and in bad times. On the averages historically, heedless of what the market does in the short term, you are going to come out ahead in the long term. And since you cannot predict what the market is going to do—ever—there is really no rational reason to try to "time" when you are going to add shares, or even perhaps when the best time to do that is.

It's always painful to see the value of your portfolio go down, and it's even harder sometimes to see the light at the end of the tunnel. What's easy is reacting to it—and it is also a very dangerous and unwise move when it comes to your invested money.

Of course I am speaking not to speculators here, nor traders. I am speaking to investors. Why is that an important distinction to make? Speculators and traders are not investing in companies. These folks are investing in short term movements in the markets. Be they short sellers or day traders buying long hoping to gain a few bucks on a momentum play, the reason they jump ship is because they are riding in a big ocean with heavy waves afoot in a dingy. They can't handle the rougher seas like a bigger boat or yacht can. Investors are the bigger boat, and they can ride out the storm.

This market will fall some more. That's to be sure. All of the indications with oil and a slowing economy in Asia and Europe point to that. But that's a time to buy, not to sell. And since you happen to be an investor invested in companies this just means that those companies, whose fundamentals really haven't changed all that much aside from being kicked around by other falling sectors and stocks, are going to be going on sale. That's when you load up, get more bang for the buck, and enjoy the ride back up eventually.

What's more, if you are invested in dividend paying stocks it's an ever better ride up since the shares you will buy in the downturn will obviously be cheaper, increasing the total yield on your invested dollars.

Sit tight, stand still, do nothing—well, other than buy more stock. The markets will find their current bottom, and then it's bottoms up. The smart money, the investors who ultimately understand the nature of these market dynamics of rising and falling will have won the prize and laughed all the way to the bank.

Mark my words...for the umpteenth time.

You're Crazy To Sell Your Stocks In A Down Market

The reality is that it hurts to see your portfolio value take a tumble. Even the most hardened, seasoned investor is going to more than cringe a bit at the sight of declining values. But the one thing I always stress, and the one thing I think everyone invested in the markets should bear in mind with absolution is that the markets always come back. What's more, the markets also tend to come back higher than where they left off before the tumble.

The key for me is not in what is happening in the micro. But what is bound to happen in the macro. I buy companies for a reason, and that is that I think the companies are worth more than what their current share prices are. I am buying the future valuation of the company as I see it. Not the near term valuation. The reality is that the future is sometimes hard to see when everything else in the near term seems to be a mess. When the entire markets are taking a spill, the future is going to be even harder to grasp when it comes to any given stock, but you still have to see beyond that. You have to see the macro.

When the markets tumble this is effectively putting stocks on sale. If it happens to be a solid company. And of course you buy it because you believe it truly is a solid company. Unless the future fundamentals of the company are falling with the markets, there is no reason to sell. In fact, there is an even bigger reason to buy more in the selloff.

About eight years ago when the markets took their biggest hit since the infamous Crash of 1929, it was damned painful to watch. There were more than a few occasions when I thought to myself, this is it. We're done. The markets are done and I will never see my money ever again.

I could not have been more wrong. And luckily there was another side of me that knew, despite the grand mess before my eyes, that I was indeed wrong. The markets would come back. The money would not be lost forever. In fact, what was before my eyes was a terrifying mess of epic proportions, but it was also a major opportunity to make money I never could have made had the mess not happened.

I bought all the way down despite my better judgment. And I also bought all the way back up. What I did essentially was try and forget about the rotten, empty pit in my stomach and just keep on doing what I always did. Find good companies to buy whose fundamentals looked strong for their future.

...and then wait.