Is it Safer to Pull Your Money Out of the Stock Market?

When it comes to investing, it can be difficult to know when to stay in the market and when to pull your money out. Taking your money out of the stock market may seem like the safe option, especially if prices continue to plummet. However, selling your shares now could result in losses. It's important to analyze your portfolio and determine which stocks are safest to sell and safest to invest in a bear market.

Don't sell a stock with long-term growth prospects just because it's lower in the bear market. Take this opportunity to continue investing in it. For older investors looking to convert stocks to cash, it's important to have a plan and not be too influenced by today's market. Even if you finally replace money, you've lost the opportunity for it to grow as you invested it and for your profits to increase.

Investors can take stock of the depreciated assets of their traditional IRA and transfer some of that money to a Roth IRA. When thinking about moving away from stocks, remember that even during retirement, stocks can still be an important part of your portfolio. Even as you opt for more liquid investments, remember that stocks play an important role in a diversified portfolio. It may be tempting to sell your shares when the market is down, but it's best to have a plan and make decisions based on your own circumstances.

Expected equity returns have only improved, as stock valuations fell amid the massive market sell-off earlier in the year. Investing a fixed amount of money over time can help soften the purchase price and put your money to work when other investors stay on the sidelines or head out. If investors can get a relatively good rate (after inflation) for a bond, they will tend to take money from stocks to interest-bearing investments, such as government bonds. If you're retired, don't withdraw funds from your stocks in a bear market unless you have no other option.

Common sense may be the best argument against switching to cash, and selling your shares after the market plunges means that you bought expensive and are selling low. Read on to find out if your money is better on the market or under the mattress. Taking into account all factors, investing in the stock market is still one of the best ways to grow your wealth over time.