It’s no secret that the market can be volatile. Resisting the urge to react during times of volatility may allow you to benefit when the market recovers. Here are six dos and don’ts to help you stay focused on your long-term financial goals when faced with market uncertainty.
DO start with a plan. Before investing, it’s important to have a clear plan in place. This plan should include your long-term financial goals, investment timeline, and the amount of market fluctuations that you can tolerate. By starting with a plan, you’ll likely be better able to make informed decisions about where to put your money and how much risk you’re willing to take on.
DON’T invest in something you don’t understand. If you’re not familiar with a particular investment, consider taking the time to research it so you better understand the risks and potential rewards before putting any money into it.
DO diversify your portfolio. Diversification is key when it comes to investing.* By spreading your money across a range of investments, you can potentially reduce your risk and increase your chances of positive returns over the long term. This could include investing in stocks, bonds, and other investment types.
DON’T try to time the market. Experts say that predicting the market is like predicting the weather — you never know what will happen. Without knowing the exact moment to buy or sell, it would be easy to make a decision to buy, sell or hold that is not favorable or “miss the market,” which could be costly.
DON’T panic when the market dips. The value of the stock market moves; it’s normal for it to go through ups and downs. However, it’s important not to panic when the market dips. Market fluctuations are a natural part of the investment process.
DO invest for the long term. By investing for the long term, you may be able to ride out short-term market fluctuations and give your investments time to grow and compound over time. If you try to time the market or panic during a market downturn, you risk missing out on these long-term gains. With compound interest, you may also earn more over the life of your investments by investing less now than by contributing larger amounts later.
Keeping these dos and don’ts in mind can help you make informed decisions about your investments. Remember that investing is a journey and not a destination – the most successful investors tend to be those who are patient, disciplined, and committed to the long term.
To learn more about investing concepts and steps you can take to be a more confident investor for your future, visit the Program’s Learning Center. Then log in to your retirement plan account, go to Investments & Research, and commit to reviewing your account periodically. You can speak directly with an Investment Advisor Representative from Voya Retirement Advisors for help with your retirement account investments by calling 800.348.2272.**