Why do stocks dive together?

The falling stock market always brings people panic and anxiety. Sometimes, the whole stock market will dive collectively. This situation usually stems from many uncertain factors in the market, such as economic recession, political events or trade wars. However, the decline of the stock market does not necessarily mean the collapse of the stock market. As long as this kind of market fluctuation is treated correctly, investors still have a chance to make a profit during the downturn of the stock market.

First of all, not all stocks are the same in the stock market decline. Some stocks are more sensitive to the harsh market environment, and they may have experienced large-scale selling and price plunging. However, there are still many stocks with good quality and healthy fundamentals, and their share prices have suffered a relatively small decline. Investors should focus on long-term value and choose high-quality company stocks, whose income and profits can remain stable in the economic recession. Although the stock market will be affected by short-term fluctuations, this cannot hide the strong performance of these companies.

Secondly, investors should keep a good attitude and avoid overreaction. When the market is depressed, it is easy for investors to take overly pessimistic actions because of panic, such as buying or selling stocks excessively. Such a decision usually leads to investors losing more money. On the contrary, investors should make rational investment decisions, gain insight into the long-term potential of the market and enterprises, and evaluate the value of stocks according to the future growth prospects. In this way, investors can better safeguard their own interests even when the market fluctuates.

Finally, investors should expand their investment portfolio to avoid excessive concentration of risks. The decline in the stock market shows the risks of market volatility and uncertainty. Therefore, investors should look for other investment channels, such as bonds or real estate, to spread risks and improve investment returns. Especially in the downturn of the stock market, other assets may perform better in the market than stocks. This can help investors explore new opportunities in the portfolio and reduce the overall investment risk.