Don’t panic. Periods of market volatility can be anxiety-inducing, but they aren’t as bad as they seem—if you don’t panic. In fact, although it may seem counter-intuitive, with the right mindset, they can even be seen as an opportunity. It may seem impossible to think about opportunities after seeing your portfolio tank, but in the end, it all comes down to how you react. When the market begins fluctuating and you start feeling nervous, here’s what I recommend you do.
Leave Your Emotions At The Door
One of the worst things you can do in a volatile market is let your emotions drive your actions. The effects can be disastrous. Volatile times call for a stone-cold, logical outlook. Remember: The numbers you see in your account are just that—numbers. They don’t mean anything unless you sell. Don’t let fear get the best of you. This brings me to my second point.
Think Long Term
Let’s take a second for a brief history lesson. The market has had its ups and downs. It’s happened before, and it’ll happen again. It’s inevitable. The U.S. has seen some horrible economic crashes, but they were always followed by recovery and growth. That’s good news for you. Why? Because you’re playing the long game. To you, it doesn’t matter how the market behaves this year. What matters is how it behaves over 10, 15, or 20 years.
Don’t Follow The Crowd
When the market spirals out of control, you’re going to see a frenzy of novice investors cashing in to avoid “future losses.” But that’s not what you’re going to do, is it? You know better. You’ve checked your emotions at the door. You have a long-term mindset. And thanks to this mindset, now you have an opportunity.
Go Stock Shopping
Want to know the difference between novice and experienced investors? Novice investors see a market crash as a crisis; experienced investors see it as an opportunity—a blowout stock sale. I’m not saying to go out and buy random stocks without doing your due diligence. But if you have a company with a strong track record and long-term consistent earnings, then, by all means, take advantage of the discounts. In the grand scheme of things, this momentary dip will likely be an insignificant blip in the radar of the overall stock performance.
Seek Professional Guidance
I saved the biggest mistake for last—trying to do it alone. The way you invest your money is one of the most important decisions you’ll ever make. After all, it will determine the future quality of life for you and your family. Making one wrong “novice” mistake can have a huge negative impact on your retirement years. Invest wisely, and you’ll live a comfortable life, leaving a legacy your children can enjoy. Invest poorly, and they’ll have to find a way to take care of you. That’s why it’s essential to seek professional guidance. Financial advisors are experts in creating plans to help you achieve your financial goals and avoid any pitfalls along the way. Don’t leave your future up to chance. Our team at The Harvey Group would be happy to help you build a personalized plan that will stand strong during market volatility. Contact us by emailing [email protected] or calling (703) 549-5447.
Steve Harvey is a financial advisor with more than 34 years of industry experience. He is also the founder of The Harvey Group, an independent investment consulting firm based in Alexandria, Virginia. He works closely with middle- and upper-middle-class families to help them address their critical financial planning challenges, from investing with confidence to planning for retirement. Based in the Washington, D.C. area, he works with clients throughout Virginia and Maryland. Learn more by connecting with Steve on LinkedIn or visiting www.steveharveyllc.com.