Market volatility like we’ve recently experienced, along with the media coverage surrounding it, can be uncomfortable even to the most seasoned investor.
But, one thing we can learn from history is to be patient and know from experience if we’re in the market for the long haul, we have the opportunity to recover losses and realize potential gains in the process.
The key to balancing your investments is to diversify and practice dollar-cost-averaging. Dependent upon your risk tolerance and time horizon, it’s important to have your assets spread among a variety of different asset classes and investments. Diversification can help provide a balance in your portfolio. Many times, when one asset class or investment vehicle is performing poorly, others may be experiencing gains.
Dollar-cost-averaging provides the opportunity to buy when the market is high, and when it is low; therefore, may help minimize short-term risk and result in a lower average cost per share. The key is to be consistent in your investment program by investing periodically, such as monthly through payroll deduction, bank withdrawal or the investment itself.
History has demonstrated volatile periods in both the equity and fixed income markets. While no one knows where the next short-term move will take place, we can look to history to help illustrate there may be positive swings.
You’re certainly not alone when it comes to market frustration. Take the time to meet with me and learn what you can do in the long and short run to prepare yourself for your future. A big concern we have is people doing nothing. If you take no initiative to invest in yourself then the decision has been made for you and you may not like the outcome. I’m here to help you avoid making short-term decisions that could impact you in the long-term.
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