Kevin O'Leary: What To Do When The Stock Market Surges

Take the emotion out of it and hold steady.

When the market surges, it is easy to get caught up in the financial frenzy and be tempted to sell your stocks that are up. But financial guru and star of ABC’s “Shark Tank,” Kevin O’Leary, has different advice: Take the emotion out of it and hold steady.

“Sometimes, there’s exuberance in the market and investors are willing to pay more, sometimes when they get concerned and they’re risk averse, they want to pay less. That’s called volatility,” O’Leary tells CNBC Make It. “Very often, this is an emotional decision.”

But “You shouldn’t try and time the market,” O’Leary says. “When the market soars, it’s not necessarily time to sell. When the market collapses, it’s not always time to buy.”

Instead, says O’Leary, “Take a small portion of your income every month and invest it. That’s averaging in. That’s the idea.” O’Leary suggests investing 5 to 10 percent of your income.

He says what everybody should understand about the stock market is that “it has its own forces at play; nobody can control it. Every day, the world makes decisions on what they want to pay for any stock.”

That can be maddening, O’leary says, but it’s not something to be too concerned about because companies and the economy ultimately grow over time, and so will the market in the long term. Indeed, the S&P 500 index has earned an annual average return of 9.8 percent over the past 90 years.

“Price swings of up to 30 and 40 percent are not uncommon in the stock market when you look over 100 years of history,” O’Leary says. “So when you see a violent day where the stocks go down 5 or 6 percent; get over it. It’s normal. In fact, not having volatility is not normal.”

That’s why investing regularly is important.

“Sometimes you’ll buy stocks and they’re very cheap. Sometimes you’ll pay more for them,” he says. “But if you’re averaging over time, that’s a very good long-term strategy.”

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Kevin O’Leary: This is what you should do when the stock market surges | CNBC Make It.

[RamirArcega]

He just educated me about dollar-cost averaging in about 2 mins.

[thelaw]

These are very good lessons from Kevin. The technique he describes is dollar cost averaging and should be taken by every casual investor.

[panchothetoypoodle]

When YouTube recommends this right now, when the prices are high!🤣😂🤣😂

[arnexuv]

They never cry for you so never cry for them !

[x-men-]

You're wrong Kevin. Time the market is important. If it's down, buy more, you will make more money when sell it at high.

[BIGJ]

Valuable lesson to learn for every investor

[dylanw]

I guess a better question that should be asked is what fundamental metrics should you use to determine what is a good investment and what is not? Being an accounting major, I always did well in my finance classes, but the concept of investing was always a strange concept to me. Seeing all the volatility in the market, how do you know what is a good investment? I know many of the ratios that are used in evaluating a stock but is at simple as entering in your metrics and these are good investments?

[BibleSamurai]

"dont get emotional about stocks. they never cry for you so you shouldnt cry for them"...lol. tell that 2 da the ppl that worked for Enron

[samanthasanchez]

I watched this video like 20 times lol my portfolio is down big I know I own good companies I'm buying more now

[isaacannanjr]

What’s the best way to invest money for beginners? I’m 24 years old. How much should I start with?

[salalfda]

This is the only man I would work for .

[brianmcg]

Watching in 2020. Yep, it’s volatile all right.

[biskit]

Would love to know how many Americans that put money into a 401k since 21 yrs old till 65 have over a million dollars in that account? If this were true, wouldn't there be many more millionaires, instead of broke people in the US...

[MKMK-bjsk]

*For the 1% who read this comment, have a **-nice-** wonderful day!*



*Season's Greetings and Happy Holidays*

[khusseinkhomeini]

Research from Vanguard shows lump sum investing beats dollar cost averaging the majority of the time. It is however good to build a habit in investing.

[Kirbyle]

Should I still invest if there is a recession predicted to occur by 2021? Its been challenging to start because I keep worrying about losing my money or missing out on buying low if the recession does come.

[costa]

1.2million dollars will not be worth 1.2million dollars

[RadBunny]

“I’m the short term, the stock market is a voting machine. In the long term, it’s a weighing machine.”

[skyrimpanther]

56000$ average
That’s nearly 4700 a month
It needs more than 10% a month of that to reach 1.2 Mil at 65
And he said every week investment confuses me!

[marcomatthewsbergamo]

Just invest in what your good at even if it's just a hobby all this going to school get an education is for people that don't want to make money they just want a midlclass life.... "saving at 21" please you need to do everything possible at that age to become financially free if you put in the time and do it non stop in 5 years you can build an empire or even less because of the internet and the way technology is getting built fast... do it when your young not when your 30 or 40 so that you can enjoy life when your 30 or even 25 if you put in the time and hard work... its not rocket science it's all about connect with the right people to build something out of nothing... nobody becames rich alone...