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Staying Calm During a Volatile Market

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After hearing the term “bear market” repeated every hour on the news and watching recent stock behavior, you might feel anxious about this volatile market. Today, we’ll talk you through ways to remain calm and focused during turbulent economic times.

Why is the Market So Volatile Today?

There are quite a few factors contributing to market volatility at the moment. These include the war in Ukraine, the ongoing recovery from the COVID-19 pandemic, global supply chain issues, high oil prices, rising interest rates as the Federal Reserve looks to tamp inflation,  impending midterm elections, and growing fears of a recession. 

Read our June 2022 Market Review. 

What to Do When the Market is Volatile

The first thing to remember is that market changes are an inherent part of investing. While downturns can feel uncomfortable, they are never permanent. Following these steps can help you remain confident in your financial planning and make better choices about your investments: 

  1. Diversify Your Portfolio. If you’re not confident about your current investment strategy, it may be time for a portfolio check-up. A diverse portfolio is better suited to weather economic turns because your money is in different pots with varying risk levels. This approach can enhance future return opportunities since your eggs aren’t all in one basket.

Learn more about Trajan Wealth’s approach to creating diversified portfolios.

  1. Stay the Course. Pulling money out of the market can be tempting, but it is inadvisable. While it may feel good in the short term, this maneuver disrupts long-term financial goals and can cost you big time. Keep in mind, historically speaking, bear markets do not last very long. Stay patient.
  2. Maintain Investments. Instead of reacting to the whims of the market, set up and maintain regular investments. By routinely contributing a fixed amount, you’ll grow your portfolio over time, regardless of external factors. 
  1. Discuss Your Finances With a Fiduciary. If you’re closer to retirement age, you might understandably feel the pressure of the market even more. Don’t let the anxiety get the better of you. Stick to your plan. Remember, if you dip into retirement funds before you’re 59 ½, you’ll have to deal with a 10% penalty and potentially a tax hit. Fiduciary financial advisors have a keen sense of economic patterns and can help guide you through this time.
  2. Align Your Investments With Your Timeframe. As you begin approaching retirement age, talk with your fiduciary about rebalancing your investment portfolio with less risky options that can withstand a volatile market. 
  1. Focus on Long-Term Financial Goals. It can be hard to keep your eye on the future when the present feels chaotic. Remember, markets tend to bounce back. Let data and statistics guide your decisions instead of emotional reactions.
  2. Check Your Investments Mindfully. Instead of a daily worry session over your investments, check them once a month or every two months. You’ll get a sense of the larger picture instead of stressing out over daily fluctuations. 

You Hold the Key to Your Financial Future 

A patient and holistic perspective are vital during market volatility. If you’re feeling uncertain about your situation, it may be time to call the professionals. Our trustworthy team at Trajan Wealth wants to support your short- and long-term financial goals through a healthy and personalized investment strategy.

Schedule an appointment with our team of fiduciary financial advisors today! We look forward to serving you. 

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.