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How To Cope With A Falling Market

By The Motley Fool Staff
July 12, 2002

Terrorist attacks, accounting scandals, profit warnings and bankruptcies -- the stock market hasn't been a bed of roses these last couple of years. Indeed, the FTSE 100 recently touched a five-year low.

So what should you do?

Bottom line -- don't panic.

In fact, now could be as good a time as any to consider buying into the stock market. Remember, upturns always follow downturns and recoveries always follow recessions.

The Motley Fool offers the following features to help you gain perspective.

Don't Panic Over Five-Year Low
Negative five-year stock market returns have been very unusual and, on the few occasions we have seen them, a little patience would have sorted you out.

Benefit From A Falling Market
The stock market, as measured by the FTSE 100 index, has fallen about 35% from its December 1999 peak. Rather than be depressed about this precipitous fall, long-term investors should instead be licking their lips with anticipation.

Why The Stock Market Is Falling: Part I and Part II
With the FTSE 100 index staring at its third consecutive annual decline, many private investors are wondering what has gone wrong.

Three Ways To Prosper From Falling Shares
Skill, patience and a long-term perspective are required in order to prosper.

Shares Are Too Cheap
One way or another, it seems hard to justify the low prices on a lot of shares right now

FTSE 100 Has Limited Downside
Of the top ten largest companies in the FTSE 100, only one has what can be described as an extended valuation.

The WorldCom Survival Guide
If you are going to try and pick individual shares, as opposed to just investing in an index-tracking fund, there are a number of things you need to look out for to make sure you're not investing in the next WorldCom.

WorldCom: The Consequences For Joe Public
What are the consequences to your shares following the $3.8b accounting fraud at WorldCom?

Lessons From The WorldCom Disaster
We relay the three investment lessons from the WorldCom collapse.

The Myth Of Capitulation
Looking for signals that the market is about to turn is a mug's game. When the big movements come, you'll most likely miss them.

Should We Reassess Our Foolish Principles?
We've all had time to reflect on recent events and speculate on how it will impact upon our lives in the future. Like it or not, consideration of financial matters is one of the things we need to look at. So do any of the fundamental tenets about our finances need re-evaluation?

What to Do In A Falling Market
Making money on the stock market can be easy, especially if you have the patience to allow your investments to grow and mature. But when stock markets take an unexpected turn for the worse, what should investors do?

Shares Continue To Outperform All Other Investments Steadily Over The Long Term
The Foolish truth of the matter is that successful investment is a case of being calm, patient and perhaps even a little boring. You have to try to ignore the fact that just about everyone in the media, and certainly all the brokers, are trying to whip everybody up into some mad market frenzy.

Why You Should Invest
With the stock market flying all over the place, the answer is to keep calm, relax, and have a nice cup of tea. You should be invested for the long term, and over the long term, equities have been the best form of investment.

Don't Take Bull From Bears
Here are five phrases that market commentators never tire of repeating these days -- and why Foolish investors should ignore every one of them.

Timing The Market
No one knows where the stock market is going next. And you can't time the market. But shares still make good long-term investments.

Don't' Be Afraid Of Buying On A War Scare
War -- what is it good for? Well, according to legendary investor Philip Fisher, it's good for buying shares.

How Low Can The Market Go?
The FTSE 100 is in freefall. But rather than judging the market bottom, investors should use their time in a more constructive manner.

Don't Panic! Don't Panic!
Look out of the window. Although the stock market is falling, people are still milling about, cars are still moving, trains are still running and there is food in the shops. Don't panic!

Why Buy And Hold Is Best
Bear markets offer great opportunities for Foolish investors. While most other investors are busy selling their shares, hoping to get out before things get even worse, a Foolish investor can continue to concentrate on the long term and benefit from the market weakness.

Three Cheers For Mr Market!
It's simple really. Market declines are great opportunities to top-up on your favourite long-term holdings at bargain prices. In these volatile times, remember Warren Buffett.

Uncertainty? So What's New?
Everyone's talking about uncertainty these days. But the future is always uncertain. As before, long-term investors should continue to hunt for great companies at attractive prices.

Lessons From The Last Bear Market
Just as bears never pre-announce their entrance, nor do they notify you when they are about to take their leave. The secret, then, is to stay invested, or if you haven't invested already, start now!

Markets Reward the Patient Investor
This is the time when we need to summon up our ability to weather the stock market pain. We should remember the stock market has an uncanny knack of staging recoveries when we least expect it, and this will reward those invested through good times and the bad.

Chop and Change? No Thanks!
A strategy is your way of managing your entire investing career. As such, it must be designed to handle both bull markets and bear markets. It's no good having a long-term strategy that works "just as long as a bear market doesn't come along".

The 1998 Market Crash Survival Guide
Remember 1998? Russia was crumbling, the rouble was collapsing and Boris Yeltsin was resigning. Global stock markets plummeted, but as always, investors saw it through.