Market volatility probably sounds scary. But learning what this fundamental part of financial markets is, and how to respond to it, might just save you lots of money, and lots of aggravation. Let’s dive in.
Market volatility refers to the frequent changes in the prices of investments. It's a normal part of investing.
Several factors can cause market volatility, including economic reports, geopolitical events, and changes in market sentiment.
Historical events like the 2008 financial crisis and the dot-com bubble serve as prime examples of extreme market volatility.
When the market is down, it's important to stay calm. Remember, market downturns are often temporary.
Focus on your long-term goals. Historically, the market has shown resilience and growth over time.
Diversify your investments. A well-diversified portfolio can help manage risks and reduce the impact of market volatility.
Continue making regular contributions to your retirement plan. This can help you take advantage of lower prices during market dips.
Consult with your Equitable Advisors financial professional. They can provide personalized guidance and help you stay on track.
When the market is up, celebrate your gains but stay grounded. Avoid making impulsive decisions based on short-term performance.
And as time goes on, consider balancing your portfolio in relation to your desired level of risk. Often, when we’re younger, we prioritize higher-risk, higher-reward investments. But as we get older, we turn to safer, lower-risk investments where the impact of market volatility might be minimized.
Understanding and managing market volatility is crucial for making informed investment decisions. Stay informed, stay prepared.
For more information, contact your financial professional or visit equitable.com/retirement to discover ways to manage market volatility. We’re here to help you achieve a comfortable, rewarding retirement.
