Should Market Uncertainty Affect How You Invest?
Due to the upcoming presidential election (among a plethora of other factors), you might be asking “how should I invest during times of market uncertainty?” After all, it’s a natural instinct to want to change your plan if the underlying conditions get choppy. This reaction is heightened even further when it’s your money on the line.
So how should you actually invest during times of market uncertainty? See our focal points to find out:
Stick with your long-term goals
When you’re tempted to change your long-term strategy, remember that these changes can often detract from your long-term goals. If your portfolio is crafted to reach your retirement goals in a decade, for instance, you’ll end up throwing your goals off-track through emotional reactivity to a market dip.
Despite any market volatility, the stock market has always gone to reach new highs and recover from any downturns: that’s the beauty of long-term plans. Keeping these in mind will help you batten down the hatches and invest accordingly.
Don’t try to time the market
Even if you have your long-term goals on the horizon, it’s tempting to exit or enter the market to your advantage. During market uncertainty, leaving until it all blows over seems like a sure bet. In reality, since we’re not fortune-tellers, this usually results in the unsavory result of buying high or selling low.
The simple fact is you can’t accurately know when the market will go up or down. So if you sell out of your stocks with a plan to buy back in later, you’ll most likely end up missing some of their recovery, and buying in at an unnecessary premium.
Adjust your risk tolerance accordingly
Just like with a diet, a successful investment plan isn’t the best one on paper; it’s the one you actually stick to. That’s why during times of market uncertainty, you should gauge your emotions, and if needed, adjust your asset allocation accordingly. After all, your investments are meant to bring you peace of mind; not sweaty palms.
Even a small shift towards fixed income and other low-risk investments can help you ride out waves of market uncertainty to meet those future goals.
Find out more
At LexION Capital, we provide our clients with worry-free financial solutions that meet their investment goals that can ride out market uncertainty. If you’d like to learn more about our personalized approach to investing, don’t hesitate to contact us today.