The U.S. stock markets had the worst day of the year yesterday, Monday 5th August, reacting to news of escalating trade issues with China and fears of an economic slowdown. After the Dow closed down 767 points, investors were understandably nervous. However, this morning saw markets rebound as China took steps to ease the currency war with the US. So, what to do when the markets become volatile…
It’s understandable to be worried about your investments right now with the volatility of the markets. During stock market volatility, it’s important not to panic! Avoid making financial mistakes that only serve to damage your portfolio in the longer term.
If you have any concerns or questions about your investments or you want to talk about your financial plan give us a call 091 778677.
Above all…Don’t panic!
At times like these, it’s important to put current conditions into perspective. This is not the first time the market has taken a tumble and it won’t be the last. Successful long-term investors know that it’s important to stay calm during a market correction. Market volatility has increased in recent years and the media can often make it seem like each fall is worse than the one before. In reality, volatility does not hurt investors, but selling when the market is down will exacerbate your losses. Do not diverge from your long-term financial objectives because of short-term market fluctuations.
You have a diverse Portfolio
Volatility and market declines are stressful. Keep in mind that while the stock market may be down significantly, your portfolio may be made up of stocks, bonds, and other assets that are designed to work together to decrease overall losses in times like these.
Talk to your Advisor
If you’re worried about your financial plan or you haven’t had a review in a while, get in touch with us. We’ll take a look at your portfolio and offer recommendations to minimize potential losses if appropriate. Whatever your situation it can be helpful to talk with an objective third party. Human nature causes us all to act out of emotion when our accounts go down.
Cut out the noise
We know that it’s madness to react to every piece of market noise and in fact, the most damage to investment portfolios is caused by people making hasty changes in reaction to market noise. We help you cut out the short-term noise and keep your medium to long-term in perspective. That’s where your financial goals will be achieved.
As your financial broker, we’re here to keep you focused on your long-term objectives and keep you looking forward. We can’t change what’s happens with the markets but we can help keep you focused on what you can control and help you to make informed financial decisions that aren’t driven solely by emotion.