Managing Market Volatility
Conventional wisdom says that what goes up must come down. But even if you view market volatility as normal, it can be tough when your money is at stake. Although there’s no foolproof way to handle the swings, the following common-sense tips can help:
Don’t put all of your eggs in one basket — Diversifying your investment portfolio is essential, because asset classes often perform differently under varying conditions. Spreading them across stocks, bonds, and cash alternatives can help reduce your overall risk.
Focus on the forest, not the trees — Try not to become too concerned about day-to-day returns and keep your eyes on your long-term goals.
Don’t count your chickens before they hatch — As many investors learn the hard way, being overly optimistic about investing during the good times can be as detrimental as worrying too much during the bad. The right approach is to be realistic. Have a plan, stick with it, and strike a comfortable balance.
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