Market volatility can be unsettling for even the most knowledgeable investor and could lead to impulsive investment decisions that may not align with your long-term financial goals.
Here are some fundamental principles to help you get through periods of increased market fluctuations.
- Remain Calm. It’s easy to let your emotions get the better of you during stressful times – investing is no different. Sitting on the sidelines or selling for the temporary relief of cash might cost you more in the long run.
- Stay Diversified. Diversification is essential during periods of market stress. While by no means immune to the current downturn, a well-diversified, professionally-managed portfolio may experience less volatility in turbulent markets.
- Be Patient. There’s always uncertainty when investing in the markets, but market downturns don’t last forever. While it could take some time, markets should recover, rewarding patient investors.
- Stick to the Plan. Downturns come and go. A financial plan can provide the discipline to ride out the short-term uncertainty. By recognizing short-term market uncertainty for what it is, you can help ensure that it doesn’t derail your long-term investment success.
Focus on the things you can control, such as maintaining a long-term view, staying diversified and working with a Scotiabank advisor to determine the best course of action to help you stay on track to meet your financial goals.
If you don’t have a financial plan in place, contact a Scotiabank advisor today to develop a plan that makes sense for you.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.