In a volatile market, it's easy to allow your emotions to influence your investment decisions. But if you can keep your cool while those around you are losing theirs, you may be able to take advantage of potential opportunities.
In the current market environment, the value of your holdings may be fluctuating widely — and it's natural to feel tentative about further investment. But regularly adding to an account that's designed for a long-term goal may cushion the emotional impact of market swings. If losses are offset even in part by new savings, the bottom-line number on your statement might not be quite so discouraging. And a basic principle of investing is that buying during a down market may help your portfolio grow when the market turns upward again.
If you've been watching the market lately, perhaps the first question on your mind is, "Should I make a big change in my investments?" In reality, a volatile market isn't the best time to do a complete makeover of your portfolio, especially if you have long-term financial goals you're trying to address. Even if you feel that your portfolio needs adjusting, maintaining a firm grasp on your fundamental investment strategy can help you be more thoughtful about making any changes.
When the market is in a state of turbulence, it is important to have an investment strategy and stick to it. Taking the following steps may help you stay calm in a turbulent market:
Since its inception the market has always experienced ups and downs. What's key is to make rational decisions and necessary adjustments when the market is in a volatile state. It's always good to try and keep emotion removed from your investing decisions. Make sure to speak with your financial advisor to help inform your decision making. Aside from that, here are some best practices for you to follow.
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What is it?
By definition, a crisis is a turning point, a time when you have to make crucial decisions (often suddenly) that will affect your future. Although smart planning is the key to effectively dealing with periods of crisis, you may find yourself suddenly dealing with an unexpected event that you didn't prepare for, and you wonder what to do next. Whether you're planning ahead or dealing with a crisis now, take control. There's no escaping the fact that a crisis is a life-changing event, but how you handle a crisis will, in part, determine whether your life changes for the better or for the worse.