Tips on Navigating Market Volatility (03/20/2020)

The sharp rise and sudden fall of the market can feel like sailing in rough seas, and staying the course with your savings plan may feel like your financial goals are at risk. You may be thinking, should I sell all my investments? Is it too late?
When we help investors design asset allocation plans, it’s with volatile market periods in mind. Diversified portfolios with a mix of different holdings can be a strategy to weather a tumultuous period.  This may allow your diversified investments the opportunity to recover whenever the unpredictable markets turn positive.

Below, we have compiled a list of tips and resources to help navigate these choppy waters.

Tips to help you keep calm and carry on:

  1. Review the long-term trends in the market: Looking at the long-term history of the market can help you keep in perspective the cyclical nature of these types of events. 
  2. Don’t try timing the market: Your emotions usually leads to poor decision-making for your long-term financial health. It’s time IN the market, not timing the market that has the potential to reward investors over the long haul.
  3. Create a plan for market volatility: Being prepared for a potential market drop helps limit emotional reactions to volatility. Speak with a financial professional about your short- and long-term goals.
  4. Patience can be an asset: It’s not easy to watch the market fluctuate, but by building a diversified portfolio and staying the course during volatility, you could create a better chance of achieving your long-term financial goals.

Resources at Your Fingertips

How to create an asset allocation plan to match your account goals

Risk is an unavoidable part of investing. Knowing how to plan for risk is a critical step in your investing journey.

Homestead Funds’ Helpful Tips

How much an investor risks missing out on by trying to time the market

Financial market volatility – real or anticipated – is often accompanied by a strong emotional reaction. The simple reason: you’re human. (YouTube video)

Did you know?

One of the benefits of being a Homestead Funds shareholder is that we will work with you to create a custom asset allocation plan. Call us at 800.258.3030, option 2, to speak with one of our client service associates, who are ready to assist you with your investment needs.

Asset allocation and diversification do not guarantee a profit or protect against a loss in a declining market. They are methods used to help manage investment risk.