Three Tips to Stay Invested and Weather Market Volatility

Three Tips to Stay Invested and Weather Market Volatility:

So what do you do when the markets “go crazy” and
you’re not enjoying the ride?

First: Stay on the Ride.

Markets always move up and down and market losses generally don’t last long. Embrace it and stay invested. Investors make their money when the market is down. This is because when stocks decline from previous highs, they can be purchased at a discount

Ever heard the saying “buy low, sell high”.

This is exactly what it means. When those stocks you purchased at a lower price head back up again, you make money. If you panic and sell low and get out of the market, you lose money. Think about it, would you unbuckle your seatbelt and jump off a coaster in the middle of the ride? It’s best to stay buckled in.

Second: Set Yourself Up to Enjoy the Ride

Get yourself in the right state of mind. You know the markets fluctuate so be prepared for that. Stay focused on your investing goals. Don’t pay attention to the doomsday sayers in the media. Be sure your portfolio is diversified and meets your tolerance for risk. Diversification in your portfolio is critical when markets are volatile. The old saying “don’t put all your eggs in one basket” applies here. By spreading your investments out across a wide range of assets, you will reduce your investment risks.

Third: Seek Help from a Professional

If you feel ill, you go to the doctor. If you’re car is making odd noises, you go see your mechanic. If you have a difficult time weathering the ups and downs of the market see your financial coach. He/she can go over your financial plan and help you weather the storm. Mark Matson CEO and Founder of Matson Money put it like this:

"You need to create your portfolio in such a way that it doesn’t matter whether its war, whether it’s recession, whether it’s inflation, you need to be able to live with the volatility. You have to stay (in the market) long term and not over react to anything. It’s never the right time to panic… People who panic sell when prices are low – the exact opposite of what they should be doing. Have the courage to stay the course in your long-term investment strategy. Don’t overreact. Diversify prudently. We don’t know in what direction the next 20% will be. But we do know the next 100% is always up."
- Feb 8, 2022 Fox Business News Neil Cavuto Coast to Coast