Welcome everyone to the Main Street Business Podcast. This is Matt Sorensen, your host for today. Please enjoy.

The stock market has been crashing in recent days. And a lot of investors asking the question,

what should I do? Should I be selling right now? What strategic decisions should I be making

for my wealth and my future? The S&P 500 itself is down 10%. Your $100,000 account is now

only worth $90,000 right now. In today's video, I'm going to break down three important considerations

you need to take into account when the stock market drops. Now, the first thing I want to say is

the market always comes back. Just look at the S&P 500 itself. In the last 20 years,

we've had 26 corrections in the market where it went down and came back. The most recent one in

2022, 27 percent, the stock market went down and came back. Now, that was over 282 days. This was fear of inflation,

rising rates, the Fed tightening, all that stuff coming back. And so we have corrections.

I mean, every year, I'm just looking at the chart here. The market goes down more than 5%

and there's a correction period. But it always comes back. It's just a matter of when. So the first thing I want to think about is we want to stay invested. We want to stay the course. Don't go out and go into cash. Okay. I want you to stay invested. The worst thing you can do is miss the rebound. Okay. You want to buy low and sell high. Right now if you're a seller in the market and you're going to cash, you're selling low.

Okay, that's the opposite of what you should be doing here. But there's really two critical

considerations you should do. They're going to add more wealth into your pocket when the market

goes down. Now, one of the most strategic wealth building strategies you can do when the stock

market goes down is something called tax lost harvesting.

And what you're doing here is you're selling your stocks or index funds at a loss, and you're

using that loss to offset other gains you might have in the stock market.

So for example, let's say you bought the S&P 500 fund and you bought 300,000 worth of it,

okay? So you had $300,000 purchase price of an S&P 500 index fund.

And right now, let's say, it's down 10%, which it has been. And now it's a value of $270,000.

Okay. If I sell now, I'm going to have a loss of $30,000. I can use this loss to offset other taxable gains I might have in my stock portfolio.

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