With each passing month market volatility has been top of mind for most investors. The imposition of tariffs has raised concerns among many investors about what to do next and the best way to protect their funds. Ultimately as we navigate the coming months fixed-income investors should proceed with caution and clarity with their investment strategies. It pays to have a plan and sticking to your financial plan is strategic in maintaining a well-balanced portfolio.
Protecting your portfolio and yourself from misinformation is a key element to keeping a clear head. Information spreads quickly in this digital age of clicks, shares and likes. It is very easy to be overwhelmed by constant news cycles or fall victim to erroneous information. Understanding who to trust and where you should seek reliable data is a key strategy to mitigate against the influence of sensational content. The more time spent online, the more digital algorithms will prioritize and amplify what you see. Be careful about where you get information and from whom. Even amongst friends proceed with caution when sharing information as it may be an echo chamber that lends to confirmation bias.
A second tip to navigate these times is to keep a clear cool head. While market downturns may be unsettling, history shows the financial market will recover and gains will return. Your financial plan should be one you can live with. If you are uncertain about your portfolio, speak with a licensed professional to guide you and make any necessary adjustments to your portfolio.
The assets in your portfolio should be balanced and have a mix that aligns with your goals, timeframe, risk tolerance, and financial situation, and you can stick with it despite market volatility. A well-diversified portfolio provides a buffer for risk and positions against market downturns.
Thirdly, always remember the saying “time in the market outweighs timing the market”. Trying to determine market highs and lows is cumbersome and can strip your portfolio of gains. During times of volatility, it is easy to panic sell, this in many instances is a costly mistake as buyers reenter the markets on an upswing. Investors who make this mistake sell low and buy back into the market high. Pulling out of an investment that has strong fundamentals is an emotional response and not an analytical move. Being on the sidelines will make it harder for you to catch up. Monitor your portfolio and seek reputable advice if you must exit a position during times of volatility.
The last tip I would like to share is don’t be afraid to get help. There may be advantages for you even during times of volatility. Volatility can be a source of opportunity to purchase quality assets for your portfolio at a discount. If you are unable to navigate your portfolio alone, seek the advice of a licensed professional. If you have an advisor, make an appointment to speak about concerns and review your investment strategy. Remember to be careful about the information you consume and share your concerns openly with your licensed advisor. They can effectively help navigate these challenges and ensure you have a resilient portfolio during this period of market uncertainty.
Christine Rankine is Assistant Vice-President -Personal Financial Planning at Sterling Asset Management. Sterling provides financial advice and instruments in U.S. dollars and other hard currencies to the corporate, individual and institutional investor. Visit our website at www.sterling.com.jm
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