Down Markets Make Millionaires: Your 5-Step Playbook to Get Started
Don't panic when the market drops, just profit. Here’s a simple, step-by-step plan to turn falling stock prices into wealth.
Here’s the thing about down markets: people panic—beginners, pros, almost everyone! But not you. This is your moment. You’ll stay calm and disciplined, buy wisely, and build serious wealth.
Here’s your step-by-step game plan to profit during a downturn.
The Solution
Step 1: Check Your Cash Reserve
Only invest with cash reserves.
Ideally, you have money set aside just for investing. If not, don’t worry, here’s what you’ll do:
Check your cash reserve, which is what’s left after debts and essentials (you can use my Earn Out Loud Monthly Budget Worksheet if necessary).
Set aside a specific dollar amount for investing.
Transfer that money to your brokerage account—immediately.
Pro tip: never invest money you aren’t willing to lose! It’s cliché but crucial. Trust me on this. It saves you heartache, especially when stocks need time to rebound from a down market.
Step 2: Build Your Shopping List
By now, you know I’m all about large-cap and mega-cap stocks—that’s not going to change today.
Why? I firmly believe they’re the best investments for beginners. They’re proven winners with strong fundamentals and steady cash flow. Plus, many still offer excellent growth potential.
Using large- and mega-cap stocks, focus on:
Three stocks or ETFs (or use my preferred list).
At least one ETF for diversification.
At least one individual growth stock to maximize gains when the market recovers.
Step 3: Buy in Stages (Don’t Spend All Your Money at Once)
If the market falls further, you want to capitalize on lower prices. So, do not spend all your money in one go. Instead, try one of the following options:
Dollar-Cost-Averaging (DCA): Invest a fixed amount regularly (like weekly or monthly), regardless of the price. Over time, this can lower your average cost and lead to higher returns.
Support Levels: Buy near key support levels for much better entry points (need a refresher? Click here.)
Pro tip: invest consistently, regardless of the method you choose. No one knows when a downtrend will end, so pace yourself and keep cash on hand.
Step 4: Automate the Process
Life’s busy, I get it. You don’t have time to track stock prices all day. The great news is, you don’t have to.
Automate the process. Here are three ways I like to do it:
Use limit orders. This allows you to set your orders at specific prices, and your broker will automatically buy the shares you want when the stock reaches your preferred price.
Set price alerts. Many brokers allow you to set up alerts that notify you when a stock reaches a specific price.
Set up recurring purchases of stocks and ETFs. That way, your investments are on autopilot as long as cash is in your brokerage account.
Step 5: Ignore the Noise and Stay Consistent
I suggest unsubscribing from panic-driven news. Immediately. Otherwise, it will distract you from the truth—the market always recovers.
Historical Proof:
(1946) Post-WWII Recession: S&P 500 fell -29%, then recovered +242%.
(1987) Black Monday: Dropped -33%, then skyrocketed +335%.
(2009) Housing Crisis: Slipped -57%, then soared +306%.
Those are only a few recoveries to date, but there’s more, and here’s proof:
“You make most of your money in a bear market, you just don’t realize it at the time.”
- Shelby Collum Davis
Common psychology shows that you’re likely not to invest when stocks fall. Why? Because self-protection is rooted in your survival instincts. You will safeguard yourself from perceived threats—including financial ones.
But investing psychology urges you to buy stocks when they fall. Why? Because solid companies will thrive long after the U.S. economy recovers. So, right now, you’re buying stocks at significant discounts.
A Word of Encouragement
Instead of fearing stock market declines, use them to your advantage. Follow this playbook to turn short-term fear into long-term wealth.
Think about this…
The S&P 500 has returned more than 500% since the 2008 housing crisis, which led to a stock market “crash.” Imagine investing $10,000 in 2008 when everyone else panicked—it would now be $50,000.
🤔 Just something to think about…
-Isaiah from Earn Out Loud
✅ Want deeper strategies for a down market?
In tomorrow’s PRO newsletter, I’ll share advanced options strategies, and some sector-specific investments to supercharge your portfolio.
Retail news feeds should have no place in any investor's portfolio.