You should sell all of your investments if the stock market goes down during a recession—especially since the stock market rarely recovers after a recession. True or False?

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You should sell all of your investments if the stock market goes down during a recession—especially since the stock market rarely recovers after a recession. This statement is false.

If there is a recession and the stock market declines, should you liquidate all of your investments?

Try your hardest to hang onto your investments when things are looking dismal. One of the worst things you can do for your portfolio is to sell at a market low since it locks in losses. Rebalancing can be necessary when the market eventually reaches equilibrium.

Despite the temptation, selling your investments because you're worried about the economy is usually a bad choice. In reality, it's generally a better idea to stick with your plan, keep your investments, and even think about raising your stock market investment.

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