Current trends in the market have many investors feeling nervous about the not so distant future. While not knowing the future and what may happen in the stock market can be unsettling, there are certain things you can do to help protect yourself at times of high market volatility.
Stay with Your Plan
Whether you’re just starting out in life or nearing your retirement, you have established a plan that will help you earn the money you need. Whatever goals and methods you have developed with your financial advisor should still be maintained. If you are concerned, meet with your advisor to get his experienced input on how you’re progressing towards those goals.
Don’t Abandon Your Investments
When the market grows volatile, the first inclination for many people is to sell off their investments and hold off. They think it’s better to gather their savings and wait to see where the market goes. Instead, consider leaving your money where it is. While it may seem like a stressful course of action, it can lead toward great benefits in the long run.
Diversify Your Holdings
Instead of selling your stocks and abandoning your investment strategy, consider shifting your investments. By examining your holdings, you may find ways to add greater balance to your investments and diversify your funds.
Keep an Eye on Your Risks
While it’s advisable to leave your investments where they are, you should also make an honest risk assessment of your situation. Keep in mind that you may suffer losses, especially during times of high market volatility, so it’s important to ask yourself how much you’re really prepared to lose. You should feel reasonably comfortable with your investment strategy. If you’re not, you may want to consider reorganizing your portfolio, so your risk is minimized.
Maintain an Ongoing Relationship with Your Financial Advisor
A financial adviser is much like a doctor or an auto mechanic in that you don’t just visit these professionals when there’s a problem. Just as you take your car in for a tune-up or get a routine physical exam from a doctor, you should also be regularly consulting with your financial adviser. Through regular meetings, you can learn more about the market and get a better feel for how your investment strategy is performing. It’s easier to make small tweaks along the way than it is to make drastic changes when the market hits a slump.