Navigating the Market Volatility
Remember the good old days, more like mid - April of this year when DOW was at its highest point for the year? :) And then came the 1000 point plunge a week later. In these times, investors often panic and wonder what to do in a volatile market. What actions to take or how should they be investing when market is so unpredictable?
In general, if the stock market rises or falls more than 1%, it’s considered a volatile market. In order to plan for volatility, every investor needs to have a diversified portfolio. This will help minimize exposure to the roller coaster ups and downs of an unpredictable market.
Another option is to find investments (such as international markets or alternative investments) with low or no correlation to the US stock market to help reduce your portfolio’s overall volatility.
While the future performance of the markets is unknown, having a diversified portfolio strategy of unrelated products can help create balance and protection from extreme reaction.