When markets are volatile, it's important to stick to some basic investment rules. Here are five tips to help you keep your investments on track.
1. Stick to your guns
Understand what you're trying to achieve and how long you're prepared to invest. The longer your investment timeframe, the more likely you'll experience some form of short-term market volatility – make sure you're comfortable with that prospect.
2. Understand how you feel about investment risk
Your investment strategy should reflect your attitude to investment risk – for example, investing in growth assets like shares can increase your long-term returns, but it's likely you'll experience greater short-term fluctuations than defensive assets like cash. Take a risk profile assessment to understand your tolerance to market volatility.
3. Invest in quality
Volatile markets are not the place for speculation, unless you're prepared to lose your money on a bet that might or might not come good. Look for quality investments, and get a second opinion from your financial advisor.
4. Do not try to time the market
Investing would be simple if you could always pick the best time to put your money in and take it out. Remember that time in the market, not timing the market, is the key.
5. Get advice from a qualified source
If you're really serious about something – whether it's on a sporting field, in business – you should seek advice. Building and managing your wealth is no different. If you do not have a financial advisor , seek an advisor in your area who can help you with the following:
Set your financial goals.
Devise strategies to reach your goals.
Choose investments that suit your needs.
Make informed financial decisions.