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Tips for Investors in a Volatile Market

June 09, 2022

Market volatility can be unsettling. How can you make sure your investment strategy doesn’t suffer? We explore here.

Is recent market volatility making you re-think your long term investment strategy? Remember, market volatility is inevitable, and there are things you can implement to lessen the negative impact. We explore some strategies here.

What is a bear market?

When the overall stock market drops in value by 20% or more from its recent highs, the market is referred to as a “bear market”. The opposite is called a “bull market”.

How to cope with market volatility

  • Resist looking at your portfolio every day
  • Make sure you have enough cash outside of your investments for emergencies
  • Review your asset allocation – people tend to increase risk when the market goes up – a down market is a good reality check
  • Do not panic – market corrections are normal. There have been 39 official corrections in the S&P 500 since 1950.
  • Market corrections [bear market] are generally followed by rebounds [bull market]
  • Sticking to your long-term financial plan is the key to investment success
  • Do not pull out of the market during a correction unless you absolutely have to.
  • The average stock market corrections lasts six to nine months
  • According to market research firm InvesTech Research, the average bull market duration, since 1932, is 3.8 years,. The longest bull market in history ran for 11 years, from 2009 to 2020.

We can help you evaluate your portfolio and advise you on investment strategies. Contact us today.

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