Should You Pull Out of the Stock Market Now?

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Pull out of the stock market

If you pay much attention to the stock market, you’ve likely seen that there has been some rough days these past few weeks. The end of July was particularly painful to retail investors. Almost in lock step with the recent down days we start hearing about how fear is gripping the market and that it might be time to pull out of the stock market.

I get that feeling on one level. We have short memories and we start remembering back to 2008. I was there speaking with investors as they were jumping ship to stop the bleeding. They were seeing their retirement account balances sink like rocks into a churning sea and they wanted to preserve what little they had left. That is an understandable feeling and one that I’ve experienced myself.

However, that feeling is incredibly short sighted. It puts the focus on the day to day swings of the stock market as opposed to the longer term goals you want to reach. That can be a dangerous exchange to make, especially when you’re not aware you’re doing it.

If you’d like to read more about why you should stay in the stock market when it’s tumbling and the impact that can have, please check out my latest article at Daily Finance



Photo courtesy of: Leonleke Aalders

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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

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  • Kipp says:

    Simple answer is: NO, if you are investing for the long term, keep the money put! You don’t know what direction the market is going to go in the short term.

    • John Schmoll says:

      Couldn’t agree more Kipp! In fact, there can be opportunity to be had…as long as it’s kept with that long-term mentality in mind.

  • Grayson Bell says:

    My money is staying in. I actually just stopped watching the market as the drops were continuing. There is nothing I can do and I won’t pull out now.

    • John Schmoll says:

      Yep, it’d take a lot for me to pull out – even worse than what happened in 2008. I still watch the markets, as I’m a nerd like that but it’s more for entertainment than anything else.

  • DC @ Young Adult Money says:

    Ideally you would only have long-term investments in stocks, so pulling money out of the stock market because of some recent crash or drop is pretty short-sighted. I can understand why people nearing retirement (i.e. late 50s, early 60s) would get concerned, though, because they are operating on a shorter timeline.

  • Nicola says:

    No! Now is the time to invest, if you’re brave enough 🙂 most people should be investing for the long haul, so the key is not to panic when the going gets (temporarily) tough.

  • Rebecca @ Stapler Confessions says:

    No way! If anything, I should be putting more money into our mutual funds — if I had it 😉

  • Toby @ One Six Zeros says:

    no pulling out of the stock market! I wish I could afford to play around with it again 🙂

  • Kathy says:

    We are absolutely buy and hold investors so we have no plan to do anything other than that. Everything we own is either interest or dividend payers so as long as those payments keep coming, we won’t do a thing other than perhaps buy more. If it is a strong company the stock value will recover.

    • John Schmoll says:

      We’re the same way Kathy. We’re in index funds, as well as dividend paying stocks. If anything, we’ll be adding when we’re ready.

  • Tre says:

    I try to ignore the day-to-day noise and ride it out. The market will recover.

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