Responds on a Declining Market
The value of stock and bond markets always fluctuates. You might go through these vicissitudes with your investment. The following are two reasons support the idea that you should worry about your investment and three reasons explaining why you should not.
The declining trend should worry you for two reasons.
First, it is widely known in the equity market that to profit from this kind of investment, you have to sell your equities at a higher price than you paid. Quite different from real estate or other entity investment, the equity is a virtual product. The real value of equities depends on the people who buy in. So the price of the equity will be greatly affected by the confidence of the investors and hence the demand of the buyers. The asset price is created by the buyer in the equity market more or less. So the downward trend might suggest a panicky consumer behavior and your equity price would be greatly influenced.
Second, if you are going to sell your equities soon, the price is of greater consequence. The price varies with the mass psychology. A pessimistic view and the low confidence gave rise to the market decline, which is closely related to the price of your shares.

There are three reasons that you need not worry about the market decline stock market crash:
First, if what you look after is the dividends rather than the value of your shares, then the dividend income should be your focus. Investment for dividends shares some similarities with property owner who let out his or her own rooms or houses. The investment return is the rent paid every month by the tenant. The value his real estate on the market does not matter much for the property is not meant to sell. What the owner intends for is the income brought about by the rent. This is true to shares or mutual fund. If the dividend income could quite satisfy you, the property value on the market falls into a secondary position.
Secondly, for those who would hold their shares in the long term and keep buy in, the downward trend would not affect you much. What is more, those cheap shares purchased might turn out to be a great opportunity for you. From this perspective, a downward trend is not always a bad thing. Warren Buffet, the great investor, once suggested that the good values can be found in a market slump. Sometimes the prices of a property or something go down not because of the decrease its value but the reduced demand for this asset. Since the demand will bounce back in the long term, the fallen price will climb up accordingly. The fallen market price at present does not necessarily dictate a low price in the future. Let’s say four or five years? The price might be quite different from today. Investment is meant for the growth potential of the equity. For example, there are similarities between the calculation method of properties rent and that of the price of dividend-paying equities. The monthly rent is also a factor determine the real estate value. This reasoning is also true on the equity market. The price of the share will naturally soar if the rents rise or the business revenue grows in the future. So as the owner of this asset, your big return is at sight. Not only will you benefit from the price gaps but also the dividends generated during your ownership.
Third，as we know that higher risk brings about better returns. The more risk you undertake, the better you will be rewarded. Risk is inevitable in investment. What we need to do is to take advantage of information and reason in order to offset risks and be an informed risk-taker. If you are to taste the sweet fruits of investment, you must learn to structure your investment better and accommodate with the fact that risks are the inevitable by-products.
How much risk you can bear and to what degree are important factors to be taken into account in deciding you investment plans no matter for what purpose you participate in the equity market. One thing is clear that high return accompanies high risk.
The article represents personal views and is not intended to solicit different views or serve as advices for investors.