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Money 101 · Episode 5
March 2020. The fastest market crash in history. 34% gone in 33 days. Trillions wiped from global markets. The investors who did nothing — who turned off the news and left their index funds completely alone — doubled their money within 18 months.
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Not financial advice. This is for educational purposes only. I am not a financial advisor. Always do your own research and consult a qualified advisor before investing.
Look... March 2020. The fastest market crash in history. 34% of global market value wiped out in just 33 days. Every headline screaming the same thing — sell, get out, save what you have left. Millions of people listened. They sold everything, locked in their losses and sat on cash waiting for the right moment to get back in. That moment never came the way they expected. The market recovered fully within months and went on to reach all-time highs. The investors who did nothing doubled their money within 18 months.
"A market crash is not a disaster. It is a sale on assets you want to own for 30 years."
Look... it is not stupidity that makes people sell at the bottom. It is biology. Your brain processes financial loss in the same region it processes physical pain. Research shows that losing €1,000 / $1,000 feels roughly twice as painful as gaining €1,000 feels good. This is called loss aversion — and it is the single most dangerous force in investing during a market crash.
When markets fall 20%, 30%, 40%... the pain feels real, immediate and overwhelming. The rational response — hold, or even buy more — feels almost impossible. Your entire nervous system is telling you to stop the pain. That is the moment when the worst decisions get made.
Look... here is the most important fact about market crashes. Every single one in history has eventually recovered. Every one. Without exception. The 1929 crash. The dot-com crash of 2000. The 2008 financial crisis. The COVID crash of 2020. Every crash that felt like the end of the world eventually became a footnote on a long-term chart.
Should I sell my investments during a market crash?
Selling during a crash converts a temporary loss into a permanent one. Historically, investors who held through every major crash recovered their losses and went on to make significant gains. The decision to sell locks in losses at exactly the wrong moment.
How long do market crashes last?
It varies significantly. The COVID crash of 2020 recovered within 5 months. The 2008 financial crisis took about 5 years to recover fully. The dot-com crash took 7 years. What matters is that they all recovered — and the investors who stayed invested benefited from that recovery.
Is a market crash a good time to invest?
Look at it this way: if you planned to buy a specific item and it suddenly went on sale at 30% off, would you buy more or less? A crash means assets are cheaper. For long-term investors with time on their side, crashes have historically been excellent entry points.
What is panic selling?
Panic selling is selling investments during a rapid market decline out of fear rather than rational analysis. It is one of the most common and costly mistakes investors make. It typically locks in losses at or near market bottoms — just before the recovery begins.