For many of us, watching the market tank can make our blood pressure rise.
Add that onto the pandemic pressures you’ve been feeling over the past two years, and you may feel like you want to explode. The market’s roller-coaster performance may seem to be unusual and rather dramatic, but analysts, generally speaking, are not panicking. They are used to volatility and have been expecting a market correction for some time.
Jonathan Grant, Senior Investment Advisor concedes that market volatility can disrupt your financial goals, but it shouldn’t cause frayed nerves.
Market volatility is common. Experienced investors will buy stocks at discounted prices knowing that the downturn is only temporary and better days will be back sooner or later. Of course, watching the value of your portfolio plunge may cause you to second guess your goals and decisions. Instead of getting worried and abandoning a carefully structured investment plan, there are actions you can take to weather a temporary storm.
Don’t panic
If there is one thing on which market analysts agree, it’s don’t do something rash in the heat of the moment that could produce far worse consequences than you might have expected. Don’t sell stocks impulsively simply because they’ve lost value. Jumping in and out of the market can have a dreadful impact on your portfolio and leave you standing on the sidelines when the market rebounds.
Take some time
Bad news seems to spread like wildfire, but you can ignore it. Doom scrolling through negative headlines on social media will not help you to be informed; it may only create more stress. It may be time to unplug, relax, and try to get a good night’s sleep.
Gain some perspective
Given that markets fluctuate, long-term investors may not see that their investments are gaining ground over a couple of economic cycles. While we may be facing a difficult period right now, remember that 2021 was a year for market highs. If you are a long-term investor and have a well-balanced plan, you may see that despite some difficult days, your investments could be sound.
A downturn could be an opportunity
Optimistic investors are those who view the markets with a long-term perspective and for whom declines are simply bumps in the road. Optimists see downturns as opportunities for financial gain. If companies are fundamentally sound, discounted stocks can be an attractive buy.
Talk to your advisor
If you’re uneasy about market volatility and its impact on your portfolio or larger wealth plan, you might want to check in with your planner or advisor. They can go over your plan and your goals and discuss the potential impact a single day has on your portfolio over the long term.
Your advisor will probably tell you that time is on your side. A stable plan that reflects your risk profile is built defensively with the knowledge that markets occasionally tumble. Canadians know that during the winter they are guaranteed to be hit by at least one nasty storm, but they don’t know when. Being prepared for that storm makes all the difference.
The same is true with the markets. If you’re prepared, you won’t be flustered by market fluctuations. It simply depends on your perspective.
To contact Jonathan Grant call (705) 330-0067 Email: [email protected]
Source: Finding Calm during Market Volatility – Money Talk This document was prepared by Jonathan Grant, Senior Investment Advisor, for informational purposes only and is subject to change. The contents of this document are not endorsed by TD Wealth Private Investment Advice, a division of TD Waterhouse Canada Inc.