Ways to feel more in control in a volatile market
2022 has been a challenging investing environment. For those new to investing, this may have been the first time you have experienced market volatility and possibly a negative return on an investing portfolio.
While this can make some feel uneasy, it is normal throughout market cycles for stocks, bonds and ETFs to experience periods of both ups and downs. Over time, markets have historically shown their ability to be upward trending, even if sometimes it takes longer than others.
So how can you choose to invest during uncertain market periods in a way that plans for the long term, avoids feelings of unease and feels more in control?
Have a long-term investing mindset
By thinking long term, sell offs in the short term become a blip in a long-term investing strategy, rather than a defining moment where you potentially sell your holdings at the bottom of a market cycle.
We understand how short-term down movements in the market can feel undesirable, but it can also be an opportunity to invest at the lower part of the cycle where a lower entry price can be achieved. Investing small amounts regularly is known as Dollar Cost Averaging. By investing small amounts regularly, no matter what is happening in the market, some investments are made at the low part of the market cycle, which could help your portfolio performance over a longer time frame and manage the risks associated with investing.
With Round-Ups and Recurring investments, you can automatically invest regularly and over time.
Don’t invest more than you can afford
In times of market corrections and market stress, those who simply have no other way of accessing money for short term goals could be forced to sell down their investments.
To be able to do this, one needs to have savings for short term goals in cash, or expenses sitting ready and available in an everyday bank account, so that regular investing is still possible without the need to withdraw from a market linked investment account in market downturns.
Having a cash buffer for your everyday expenses, or an emergency fund, will also hopefully remove feelings of stress and the need to watch markets as closely.
42% of Raiz users have never made a withdrawal
Many of you in the Raiz community are taking the long-term investing philosophy head on. They are investing small amounts regularly, sticking to their goals, and building their portfolio balance for the long term.
All investments carry risk.
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