Money Matters
presented by: Vision Financial
Conventional wisdom says that what goes up, must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when it’s your money at stake. Though there’s no foolproof way to handle the ups and downs of the stock market, the following common-sense tips can help.
- Don’t put your eggs all in one basket. Diversifying your investment portfolio is one of the key ways you can handle market volatility. Because asset classes often perform differently under different market conditions, spreading your assets across a variety of different investments such as stocks, bonds, and cash alternatives, has the potential to help manage your overall risk. Ideally, a decline in one type of asset will be balanced out by a gain in another, though diversification can’t guarantee a profit or eliminate the possibility of market loss.
- Focus on the forest, not the trees. As the markets go up and down, it’s easy to become too focused on day-to-day returns. Instead, keep your eyes on your long-term investing goals and your overall portfolio. Although only you can decide how much investment risk you can handle; if you still have years to invest, don’t overestimate the effect of short-term price fluctuations on your portfolio.
- Look before you leap. When the market goes down and investment losses pile up, you may be tempted to pull out of the stock market altogether and look for less volatile investments. The small returns that typically accompany low-risk investments may seem downright attractive when more risky investments are posting negative returns. But before you leap into a different investment strategy, make sure you’re doing it for the right reasons. How you choose to invest your money should be consistent with your goals and time horizon.
- Look for the silver lining. A down market, like every cloud, has a silver lining. The silver lining of a down market is the opportunity you have to buy shares of stock at lower prices. One of the ways you can do this is by using dollar cost averaging. You don’t try to “time the market”. Instead, you invest the same amount of money at regular intervals over time.
- Don’t stick your head in the sand. While focusing too much on short-term gains or losses is unwise, so is ignoring your investments. You should check up on your portfolio at least once a year, more frequently if the market is particularly volatile or when there have been significant changes in your life. Don’t hesitate to get expert help if you need it when deciding which investment options are right for you.
-Bill Dowell 
Vision Financial Group, Inc.
4505 Pine Tree Circle, Birmingham, 35243
205-970-4909, www.vision-financialgroup.com
Investment advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities Inc., a registered broker-dealer and member of FINRA and SIPC. Vision Financial Group, Inc. and West Alabama Bank are independent of ProEquities, Inc. Securities and insurance products offered are not bank deposits, have no bank guarantee, are not FDIC insured, and may lose value. Copyright 2006-2018 Broadridge Investor Communication Solutions, Inc. All rights reserved.
