Staying the Course in a Volatile Market
Market volatility can be nerve-wracking. It’s easy to lose sight of your goals and make rash decisions. When the investment ride gets bumpy, stay calm and remember that, regardless of what the world markets are doing that day, the principles of investing wisely haven’t changed.
~ Diversify your portfolio
A well-structured investment portfolio is one of the best ways to reduce investment risk.
Diversify by asset class. Holding investments from different asset classes — cash, bonds, and stocks — can protect your portfolio against volatility. At any given point in the economic cycle, one asset class may outperform the others. By holding assets from all three asset classes, you’ll benefit no matter which one is leading the pack.
~ Filter out the “Market Noise”
The market gyrates constantly on headlines, but you should pay them little heed. Trading on day-to-day news events may be a good strategy for professional investors, but not for individuals whose long-term goal is wealth accumulation. One reason professionals profit from these events is that people listen to bull or bear voices urging them to act – not based on reason, but on the emotions of fear or greed. These voices are noise that individual investors should filter out. Failing to filter can make you a slave to the news and the talking heads on financial channels – to the detriment of your returns.
~ Commit to the long-term
Day-to-day market fluctuations don’t concern investors who are saving and investing for 10 years down the road. Trying to “buy low and sell high” may seem more exciting, but too often, people buy when the market is at its peak, and sell in a panic when it is near its bottom. History shows the overall trend of investment markets over the long term is up. Investors should hold on and wait for the market to rise again. This strategy ensures you are well-positioned to take advantage of further gains over the long term.
~ Get professional advice
We live in a complex and rapidly changing world. Few people have the time to analyze market conditions and develop a comprehensive investment strategy. Professional investment advice may be your best protection. With the help of expert advice, you can develop a solid financial plan for your future that will take you safely through the ups and downs of the markets. Call today for more strategies to put your investment program on the fast track! 404-321-6950
