Volatile Markets Offer Opportunity And Risk Alike
Chances are, the stock market has had a sharp increase or decline in recent months. Of course, this volatility can and should be expected.
Stock market volatility often results from economic uncertainty. When investors believe the economy is on the upswing, strong buying sentiment tends to send prices higher. But an adverse geopolitical event or economic trend can spark a wave of selling that sends prices down fast.
Long-term investors generally need to try not to react to short-term market fluctuations. And while it may be prudent to rebalance more often when conditions are volatile, the best way to cope is to develop a diversified portfolio with a mix of assets that tend not to move in sync over longer periods. Investing in bonds, equities, and alternative assets may smooth out the ups and downs of portfolio as a whole. But it’s important to diversify within asset classes, too—with growth and value stocks; large-, mid-, and small-cap stocks; and domestic, international, and emerging-markets stocks.
It’s easier than ever to achieve such diversity, because mutual funds and exchange-traded funds have made hedge-fund strategies and foreign stocks more accessible. We can guide you in choosing the right investment vehicles to match your goals and risk tolerance.
© 2018. All Rights Reserved.
- Four Smart Ways To Gift This Year
- How To Guard Against "Skimmers"
- Getting A Life Insurance Check-Up
- Tips On Long-Term Care Insurance
- Which Target Date Funds To Use?
- Newly Widowed Face 401(k), IRA Options
- How To Invest In Your Fixed-Income Years
- Come To Terms With Term Life Policies
- Give Away Gifts With No Gift Tax
- Is It Finally Time To Refinance?
- A Case Study: Giving Wealth Away
- Don't Be Trapped By Another State's Tax
- Get Up To Speed On Estate Planning
- Five Financial Steps For Widows
- Which States Are The Most Friendly To Businesses?