Stay the Course During Market Shifts
Ups and downs in the marketing are inevitable. But that’s not necessarily a bad thing. In fact, if you stick to an appropriate long-term investment strategy, it could be a good thing. The trick is to not panic.
Ups and downs in the market are inevitable. But that’s not necessarily a bad thing. In fact, if you stick to an appropriate long-term investment strategy, it could be a good thing. The trick is to not panic.
Continue to Invest Regularly – Even in Down Markets
Investing regularly can help take the emotion out of important investment decisions. Your employer’s retirement plan makes it easy through automatic deductions from your paycheck.
By investing the same amount each pay period, you don’t have to guess which way the market is going. In fact, by continuing to invest in down markets, you’ll buy more shares at a lower price, so if the market improves, you may have more shares worth more money.*
When the stock market takes a turn for the worse, it can provide an opportunity for you to evalute how comfortable you are with your risk level. Are you more conservative, moderate, or aggressive? It might be a good time to take a risk assessment to determine your investing comfort zone.
The market is full of swings; it’s important to realize that whatever currently happens, it is most likely temporary. As the saying goes, “Keep calm and carry on.”
Maintain a Portfolio Mix
A key way to help mitigate risk in market shifts is to have a diversified portfolio. One way to diversify is to divide your investments across the three major types of assets: bonds, stock, and cash equivalents. By diversifying, a drop in one investment might not be as impactful since it could be offset by a rise in another. A key message to remember is, don’t put all your eggs in one basket!*
Keep An Eye on Long-Term Goals
Throughout the shifts in the market, keep your long-term goals in mind. How do you want to spend your time in retirement? What are the kinds of things you want to do, places you want to see? Creating a vision of how you want to spend your retirement can help you keep focused on saving toward that dream.
The bottom line is that it’s natural to feel some anxiety when the market goes down. But those who stay the course may be in the best position to reap the benefits.
*Adherence to any financial strategy is not a guarantee of investment success nor is past performance a guarantee of future results. Investment values flucuate daily so that an investment, when redeemed, may be worth more or less than its original cost.
For informational purposes only. It is not intended to provide any legal or financial advice. Consult with your advisor regarding your particular set of facts and circumstances