Most Americans are afraid to invest in a stock market downturn.

Most Americans are afraid to invest in a stock market downturn. Some worry they’ll lose their money, while others say they lack confidence in how to invest, financial experts say.

But that reluctance to embrace investing when markets drop may cost Americans when it comes to their future retirement savings, and possibly prevent them from building a bigger nest egg, those experts caution.

About 74% of Americans, for instance, say they wouldn’t stay invested if the stock market suffered a moderate or big decline, according to a recent study of 3,000 U.S. adults conducted by Vise, a technology-powered investment management platform built for advisers.

After a historic crash in March 2020, stocks rose to records and have continued an upward trajectory following unprecedented aid from the Federal Reserve and Washington to shore up the economy amid the worst global pandemic in a century.

►Your 401(k) and the stock market: It’s getting bumpy, but experts say don’t fret

►Too young to invest? Are there enough parental controls as teenagers invest with Fidelity, Wells Fargo?

The recent declines in the stock market could give investors an opportunity to scoop up more stocks at lower prices, or at least hold steady in their retirement accounts, money managers say.

“If you’re a long-term investor complaining about an expensive market, this may be your opportunity to bargain hunt,” Lindsey Bell, chief investment strategist at financial services company Ally Invest, said in a note to clients. “But oftentimes, sitting tight and doing nothing is best if you are in it for the long haul.”

Americans fear market crashes, but they shouldn’t panic

While October is often considered a spooky month for investors, developing a bad reputation following the crashes of 1929 and 1987 and the tumult of 2008, September has actually been the worst month for the stock market, averaging a 0.4% decline, according to the Stock Trader’s Almanac.

Although stocks have rebounded from last Monday’s losses, when the Dow Jones industrial average shed 614 points, the major averages had a rough start earlier this month and remain mildly lower in September.

Story continues

Early in the week, investors worried about global growth and possible damage to markets from indebted real estate developers in China. Those fears, however, subsided after Evergrande, one of China’s biggest real estate developers, said it would make a payment due Thursday.

The S&P 500, the benchmark used to track most mutual funds, has surged 100% since the pandemic-fueled sell-off in March 2020, which has included a rally of more than 35% since November without a single pullback of 5% or more.

That’s an unusual feat of strength, experts say, considering the S&P 500 has gone through an average of two pullbacks of 5% or more per year since 1950, according to Bell. That means stocks are likely overdue for a pullback following a strong run, she added.

Investors should use a decline in the market as an opportunity to…