Steps to Get Comfortable with Market Fluctuations
One of the most common reasons people give as an excuse to not invest is fear of market fluctuations. And that is a valid fear. No one wants to lose money. But, as Greek philosopher Heraclitus once said, “The only constant is change.”
It’s the same with investments. While “market volatility” sounds intimidating, it really just means the market can move up and down, so don’t get caught up in the crazy up- and down-swings! Historically, everytime the market goes down it’s followed by an upswing.
So here are some steps you can follow when the numbers start to seem scary:
- Take a deep breath.
The first step to battle fear is to combat it with knowledge, and you already have that part down! You know that the market will go up and down, so when you hear something that makes you anxious, try to ground yourself with some deep breathing, take a walk outside, and make your favorite snack or comfort food.
- Hit ‘Pause’ on emotional decisions.
Seeing those red numbers can make you want to jump ship, but the worst thing you can do is make rash decisions based on fear. Experts have found those decisions never pay off, so wait at least 24 hours before making big decisions on your investments. Patience is a virtue, after all!
- Remember your goals.
It’s natural that your emotions go through a cycle as the market moves, from elation at the highs to fear and dismay at the low points. While the market may fluctuate, it’s not likely your long-term goals are that fluid. Stay the course.
- Diversify your investments.
One of the best ways to protect your investments is to make sure you’re investing in multiple tracks. That way if one market starts to slow or even takes a downturn, you have money in a more low-risk environment so you won’t feel as desperate to turn things around.
Now that you have a solid understanding of market volatility, you can start to decode all of the other jargon associated with investing. Download “The Beginner’s Guide to Investing Jargon”!