With the upcoming US presidential election, and uncertainty about the Brexit abroad, there is a great deal of political uncertainty in the air. Political views aside, uncertain times like these also tend to translate into heightened volatility in the stock market. So now more than ever, it’s vital that you’re aware of how to navigate stock market volatility.
To successfully manage stock market volatility, here are some of our tips to consider:
Realize it will always exist
An uncomfortable truth is that volatility always exists (to some degree) in the stock market. This tends to get overlooked because we’re likely to pay much more attention when volatility isn’t working in our favor, and the market is crashing.
As a result, many tend to attempt to dodge volatility by timing the market, while ignoring the fact that it’s almost impossible to know with certainty which direction it will move. That doesn’t mean you should too; by factoring volatility into your game plan (rather than attempting to avoid it), you’re taking a big step towards becoming a successful long-term investor.
Adjust your risk tolerance
Like many things in life, ignoring volatility for long-term growth is easier said than done. For instance, even the most seasoned investors would find it hard to ignore stock market volatility if their wealth was solely in stocks.
We all have a unique appetite for risk, and adjusting to your optimal levels is a key to winning in volatile markets. Just like with a diet, the most successful investment plan is the one you actually stick to.
Getting help from a financial advisor
A trusted financial advisor can help you hone in on your long-term goals and stick with them during times of increased stock market volatility. At LexION Capital, we help our clients accomplish this through our customized portfolios and personal ongoing advice. If you want to learn more, our fiduciary advisors would be happy to start a conversation.