To grow and protect your wealth, the appropriate strategy remains key

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BUSINESS NEWS - Headline news and uncertainty can cause panic and fear. Experienced investors and advisers are aware that unforeseen events bring risks that influence market participants’ sentiment. Such events should reasonably be expected, and astute investors understand that the risks are usually at acceptable levels when viewed on longer time frames.

So, what can you do to protect your investments in these turbulent times? Panic isn’t a strategy, so rather try to get a better perspective when markets get choppy. To help you do that, here are some strategies to consider.

Expect and accept volatility

Market volatility is a given. Rather than attempting to time the market, focus on time in the market. Historical data suggests that markets have consistently experienced steady gains over time.

Do not abandon your plan

Understanding your financial situation is key. A sudden market drop can have different implications depending on your stage in life, your financial goals and underlying asset allocation. It is essential to consult with your financial professional to minimise the impact of any impulsive decisions.

Stay invested

The key to living with market volatility is focusing on long-term results. Staying the course can be challenging, but it can also create opportunities. Short-term losses can be nerve-wracking, but making decisions based on emotions can be costly.

Source: (FiPhysician, 2020)

Stay diversified

Diversification is a basic principle in investing. Your portfolio may need to evolve as markets change. Times of volatility offer a great opportunity to re-evaluate and if necessary, rebalance your asset allocation.

Talk to your financial adviser

If market volatility concerns you, don’t hesitate to seek professional advice. A financial adviser can help you review your financial plan and determine any steps you may need to take.

Stick to your long-term goals

Review your financial plan and determine if you are still comfortable with it. Base decisions on your long-term goals and ignore daily market fluctuations. Your strategy should account for normal market volatility, so turn off the news and focus on the long term.

"The four most dangerous words in investing are, it’s different this time." — Sir John Templeton

We cannot predict the future: “We have two classes of forecasters: Those who don’t know — and those who don’t know they don’t know.” — economist John Kenneth Galbraith

We can manage minimise risk in our investment portfolios, while achieving your goals.