Navigating the world of investing at the best of times can be daunting, but in the middle of a volatile market, it can be even harder to manage. Of late, the market has been in a perpetual volatile state, so learning the right ways to invest during one can be helpful. Whether you’re a seasoned investor or just dipping your toes into the world of investing, understanding how to make informed decisions in a volatile market is crucial for safeguarding and growing your wealth. Read on for some practical tips on investing in a volatile market.
This does not constitute advice and advice should be sought in all instances before acting on it.
The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested.
Past performance is not a reliable indicator of future performance.
Investing when the market is volatile can create a lot of anxiety and fear and you may be tempted to sell everything and wait until things are looking up again. But any seasoned investor knows that often, selling low means you could miss out when the market inevitably comes back around again. This is why it’s essential to stick to your investment plan and remain focused on your goals.
Here are a few tips to help you stay the course:
Don’t try to “time” the market
Sometimes, the risk of losing money prevents people from jumping in and getting invested. They’ll try to “time” the market or strike while the iron is hot, but historically, these kinds of market-timing strategies don’t produce the desired results. The best strategy is to get invested and stay invested, no matter what the market looks like.
Stay goal-oriented
No matter what the market looks like, staying focused on your goals can help you go far. If you stay focused on your reasons for investing, rather than your returns from it, then you are more likely to stick with a winning strategy that will help you achieve your goals.
Stay logical, don’t get emotional
With a volatile market cycling through ups and downs, it’s easy to get caught up. The best course of action is to stick to your strategy and not let emotion dictate your decision-making. The best time to change your strategy is not when the market changes, but rather, when your personal circumstances change. So, it’s important not to let what’s happening in the market affect you and be sure to speak with your financial advisor before revising any investments.
Stay the course
If you have any doubt about how important it is to stay invested despite the ups and downs of the market, just look at what happened around the pandemic. When the world reopened in 2021, the market recovered only to fall again in 2022 due to inflation, the invasion of Ukraine, and subsequent issues stemming from that. Understandable, investors might feel uneasy in the middle of a dip, but rest assured that down markets usually rebound fairly quickly.
It’s also best to keep your eyes on the prize as having a long-term focus will allow you to take advantage of the opportunities market drops bring and shift your perspective from down markets being a detriment to a chance to build your wealth, instead.
Work with a financial adviser
It’s essential to regularly review your investment plan to ensure you’re still on track and make any adjustments necessary. Working with a financial adviser means you’ll have a partner to turn to no matter what the state of the market is. For help with your investment portfolio, get in contact with the experts at Dental & Medical Financial Services today.