Riding Out the Stock Market in 5 Easy Steps

Posted on: in [ Budgeting, Personal Finances, Retirement, Savings, Wealth Management ]

Riding Out the Stock Market in 5 Easy Steps

 

With the stock market bouncing up and down, it’s difficult to determine which steps to take to find a successful investing strategy. No matter if the stock market is plummeting down, or reaching for the stars, here are 5 simple steps to garnering a successful strategy.

  1. Ride out the Wave.

As soon as numbers turn south many investors flee, running from what they believe to be a sinking ship. Instead of liquidating your investments into cash, consider letting them ride, and increasing your investment at the first sign of gains. At the end of the 12 months following a bear market, a fully invested stock portfolio yielded an average return of 37.4%. On the flipside of that, an investor who missed the first six months, by removing their investment, made a return of only 7.5% once back in the market.

  1. Make Your Analysis Easier with Dollar-Cost Averaging.

Generally people agree that a volatile market presents distinctive buying opportunities. The trick with many of these opportunities is maintaining a consistent purchasing pattern to help average your overall costs. By using a specific dollar amount to spend each month you are able to determine an average share price, and average share cost, with the goal being your cost is lower than your price.

  1. Make Sure Your Portfolio is Up to Par.

In such a changing market, be sure not to put all of your eggs in one basket. Speak with your financial advisor to see if your portfolio is as diversified as you’d like! Factoring in risk tolerance and future goals, now is a great time to reexamine your financial plan.

  1. Shoot for the Long Term and not the 24 hour.

While there are numerous offerings for day-trading opportunities, long term investing options continue to prove tried and true. Instead of looking for quick returns, bunker down with a long-term strategy and watch how much your portfolio can grow!

  1. Stick to the Plan

If you have a low risk tolerance, don’t change it now, and if you have a high risk tolerance, don’t let the market alter your opinion. Keep true to both your worries and your beliefs. In flocculating markets, consistency is key!

What does the future hold? The truth is you never know! Let our financial professionals at State Bank help you bring out the best in your portfolio with our experienced investing strategy. Simply contact our investment professionals to get started today! 

 

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