Triggers for market volatility can come in many different shapes and sizes, i.e. policy uncertainty in Washington, earnings reports, geopolitical unrest, among others; however, volatility is part of investing. Volatile markets tend to make investors, especially novice investors, get startled and begin to question their investment strategies and be tempted to pull out of the market and wait on the sidelines until they feel safe to get back in.
It is important to understand that market volatility is inevitable since it is the nature of the market to move up and down over the short term; that is why it is imperative for investors to maintain a long-term perspective and ignore the short-term fluctuations. Make sure you consider an investing strategy with exposure to different areas of the markets (US small and large-caps, international stocks, investment-grade bonds, etc.) to help match the overall risk in your portfolio to your personality and goals. Here are a few tips to make the most out of market volatility:
Instead of being worried by volatility, be prepared. A well-defined investing plan tailored to your goals and financial situation can help you be ready for the normal ups and downs of the market, and to take advantage of opportunities as they
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