First time seeing a market correction: How do I handle a 15% drop in my mutual fund portfolio?

The primary rule of investing during a market downturn is simply to not panic. Experiencing your first market correction after a long bull run is like learning how to drive a manual transmission car after only driving automatics. While a 10% or 15% drop might feel incredibly uncomfortable right now, true bear markets can be much more severe.

In brutal corrections, individual stocks can easily fall 80% or 90% from their peaks. To survive these cycles, you must understand and identify your personal Uncle Point :) This is the threshold of portfolio drawdown where the pain becomes so unbearable that you need to call your uncle for emotional or financial help.

For some investors, this breaking point might be a 20% drop, while for others it might be 40%. Recognizing your personal risk tolerance before hitting this threshold is crucial. If a 15% drop is already causing you sleepless nights, your portfolio might be carrying too much equity risk for your comfort level.

Selling out at the bottom is the worst mistake you can make during a correction. Use this experience to reassess your asset allocation and ensure you have enough debt or fixed income to cushion future blows.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.