Four Strategies Investors Can Use to Remain Confident in Changing Markets

If there’s one thing about the investment market everybody can agree on, it’s that no one knows what to expect. The stock market has frequently gone through periods of unrest, especially in the last couple of years. Outlooks on our economic future can be cloudy and remote.

All this doubt makes investors very nervous — for good reason. Memories of recessions, stock market crashes, and economic slumps still linger. But even though they can wear on your patience and well-being, you can survive them.

Ty J. Young Wealth Management has seen a fair share of market turbulence. After helping clients weather times of financial stress, we’ve come up with a few general strategies to help your and your investments make it out the other side. These four approaches are easy to execute and will help you stay sane in crazy times.

Have a Retirement Account

A retirement plan is a bedrock for one’s investment portfolio. It provides a sort of security blanket for your commodities for several reasons.

By their nature, retirement plans are relatively low-risk investments. Most of them are models of investment diversity with holdings in different commodities. Portfolio diversity is one of the simplest strategies for mitigating financial risk.

Many employer-provider retirement plans include matching contributions from your company. They duplicate your regular donations to build your savings. There may also be substantial tax advantages to your retirement plan, such as tax-deferred or tax-free investment growth. Your contributions to the plan are likely tax-deductible as well.

Retirement plans also focus on the long term. Their entire reason for being is to accumulate wealth for the future. As such, it’s a source of great dependence for investors weathering troubled times in the market.

Define Your Goals

A lot of mediocre or failing investment strategies get that way because of poor planning. It’s hard to focus on building wealth without a clear set of objectives for investing.

Defining one’s goals, however, can help you master your portfolio in several ways. Knowing your purpose for investing can help you allocate your assets in the most meaningful ways. It can also drive your risk tolerance, allowing you to be flexible about your investment transactions. You can better design your portfolio to maintain long-term security and take short-term risks.

Having goals in mind also benefits your motivation to stay on top of your investments. You have specific targets in mind and can keep your eye on future ambitions. This gives your holdings a more intrinsic value; they’re not just numbers anymore. They’re the foundation for your future. 

Measure, Monitor, and Assess

Most common investors don’t have ready access to an accountant who can watch over their portfolios every day. But for an investment strategy to succeed, it must be looked after.

Fortunately, monitoring your investments is far easier than a generation ago. Online brokerages provide ample data and metrics about every one of your holdings. You can easily track a certain commodity’s progress over the life of your investments. You can also get valuable information about current news and future trends that will affect your decisions.

Since you’ve set your goals as described above, you can use them to evaluate your portfolio’s progress. You can chart growth over time through market fluctuations. You can keep on top of asset allocation, liquidity, taxes, and fees. You can back up adjustments you need to make.

It’s especially crucial to stay on top of your investments in volatile market times. Many portfolios collapse in downturns simply for lack of clarity or information. Though it can be a little stressful to keep tabs on your financial status, it’s an absolute must if you’re trying to keep afloat in disruptive times.

Never, Ever Lose Money

Reaping profits from one’s investments is easier said than done, of course. But at the very minimum, one should align their portfolio and strategy to not lose money. That goal is a little more reasonable. Even though the market is unpredictable, it’s not that difficult to hang on to what you have.

This partially depends on the goals you’ve set for yourself. They can guide you through making the right decisions and changes about your money. Long-term investments and funds are built to maintain steady, if unspectacular, gains. Having a few of them in your portfolio is an easy way to hold on to your investments.

Keep on top of your risk tolerance as well. Short positions can be instant money-makers, but they can lose money just as quickly. If you don’t have a lot of wealth built up, it’s probably best to avoid short-term speculative moves.

Stay the Course

Some standard “best practices” in investing — portfolio diversification, asset allocation, monitoring, and measuring — inherently help keep your investments healthy.