You can feel pretty vulnerable when the financial markets are volatile; after all, your personal wealth and stability is at stake. Don’t panic!
Here are some tips to help everyone weather those market gyrations.
- Talk to Your Advisor
The financial landscape is ever-changing, and it’s important to have professionals to anticipate, react and adapt to the environment,” said Alex Oxenham of Hilton Capital Management.
He continued: “ It is important for investors and wealth managers to understand what is causing the volatility. Additionally, knowing ‘where’ in their portfolio they have volatility exposure is critical to mitigate risk.”
Hilton Capital Management is a privately-held investment firm that manages roughly $1.6 billion in balanced and equity strategies.The firm’s primary strategy is a tactical income one which seeks capital preservation with an emphasis on income generation.
- Think Long Term
Markets will not stay volatile forever. Instead, they are likely to calm down after some time. Think about your long term goals.
“Any investor that seeks a return greater than inflation will have to take some level of risk with their investment capital. With that risk comes the potential for volatility and with volatility comes the anxious moments associated with market correction,” explains Oxenham.
Market volatility will happen. It is only a matter of when, not a matter of if. The best way to approach market volatility is to remember that you WILL get through it.
- Remember That Emotions Have No Place In Trading
When trading stocks or investing your money into assets, focus on logical reasons for your investments. Keep in mind that constantly worrying about your investments will only serve to cloud your judgment.
- Make Sure Your Risk Management Strategy Is Up to Date
If you don’t have a risk management strategy in place, you will end up worrying a lot more during volatile markets.
If, however, you have a solid risk management strategy, then your risk will be lower and you will feel more comfortable in your investments. For example, you should always have a diversified portfolio.
- Remember That It Is a Learning Experience
Learning how to navigate volatile times will make you emerge from them stronger and will only make you a better investor.
Studying the market during its volatility will help you learn about market trends and changes.
- Remember That Volatility Can Be Good
Volatility can sometimes present big opportunities for wins. If you can purchase the right stocks or ETFs while they are low and sell them when they go back up in price, you can use the volatility of the market to your advantage.
However, extreme caution must be taken to ensure that you are not blindly jumping into trades. The REIT in your retirement account works best when you have time to hold them and can benefit from their dividend payments over the long term. Alternative assets, like REITs, can potentially help investors balance out a portfolio that is heavy on stocks and bonds. They may even enhance returns.
Transparency Is Essential
The best advice would be to search out an investment manager who has experience, integrity and a strong investment process that will succeed in any market dynamic..
Each time a client makes an investment, they are asking that firm to help them secure their overall personal finance and future wealth. As such, there should be total transparency, integrity, and an alignment with the client’s interests.
