Investing in volatile markets: How to keep calm and carry on

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investing volatile markets

Why do humans find it difficult to accept the fact that sudden rise and quick falls are the characteristics of any investment market – be it stock, crypto, forex, CFD, or what have you? Unpleasant as it may sound, gaining money, and losing it is all part of the game.

It is true that we all dream of waking up every day to see our balances pumped up. But this is almost a fantasy! Investment markets are not a quick-money scheme, and as such, it is normal for the market to go through some spells when it is in a downward spiral.  And when it does happen like that, the decisions you make to either quit or stay the course can make or break your wealth-building ambitions.

Unfortunately, the realities of money-loss and market dips are too much to bear for some investors. As a result, many investors make so many reactive decisions based on short-term fears of losing money, and in the end, ruin their many nights of work.

But this does not have to continue anymore. Here are some guides to help you through the volatile periods of your investments.

Every Investment is Risky

First and foremost, the very first thing you need to learn to accept as an investor in any market – volatile or not – is that “risks are part of the game.” For every investment opportunity you choose to chase, there is a certain amount of risk inherent in it. But that doesn’t mean that investing in markets cannot be worthwhile.

The ability to now mitigate these risks is what distinguishes an expert investor from an average, regular investor. Expert investors understand that there is a key difference between embracing some risks and taking unnecessary risks. Especially for those expert investors in the volatile markets, there are some strategies they adopt to limit their exposure to major market risks and fluctuations. These strategies include:

  • They take control of risks

Once you understand and accept the fact that volatile markets are risky, then you need to start investing like the experts do. And one of the biggest things they do is that they always adopt the “diversification strategy.” That is to say that they always diversify their investment portfolio. Since we’ve already established the fact that volatile market investments are risky, the best thing you can do is to find a way to manage these risks via diversification.

  • But what exactly is diversification? Some may quip.

Investment diversification is the process of spreading your investments out among different companies, industries, sbobet areas of the world, and asset classes (such as stocks, CFD, Bonds, cryptos), such that the impact of downturns in a particular market will not have a significant impact on your overall portfolio.

So if you’re investing in volatile times and one of your assets (say bitcoin) crashes, such that you lose money, you can offset this loss by simultaneous gains in other markets (say stocks, Etherium, or bonds). The idea here is to lose some and gain some! More often than not, this strategy will always work for you because whenever there are downturns in some markets, there is always an equivalent amount of upturns in other markets.

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Tips to consider when investing in volatile times

In all honesty, investing in volatile times is not really for the fainthearted because of the significant amount of fluctuations and downturns that investors are bound to experience. However, that is not to say that volatile time investments are not feasible. Far from it!

That said, here are some tips to guide investors during their volatile time investments.

  • Work with a pro or an expert

There is no denying that some people are really great and better than others at this thing. During the volatile periods, these kinds of casino online people should be your biggest guide and mentor. However, if you don’t have experts or pros around you, you can hire a financial planner or advisor. Either of them will help you choose your investments wisely, rebalance your portfolio if need be, and offer you the reassurance you need in the event that things begin to go south or far from what you expected.

  • Use the dollar-cost averaging

This is an investment strategy that involves investing set amounts at set intervals. For instance, every week or every month, regardless of whether the market dips or rises. One of the biggest advantages of this approach is that it helps take the guesswork and emotions out of investing in volatile markets. Regardless of the direction in which the market is flowing, you’re obliged to invest a certain amount when the set time is reached.

  • Resist checking in on your investments

A very bad habit common amongst newbie investors is the practice of checking in on their investments as though they’re babes. Although it might be really tempting for you to want to see how much you’ve gained or lost overnight, you really don’t want to do this. The reason is that constantly checking your investments can slip some fears into your heart, especially when the market is on a downward spiral. And this can lead you to some poor decision making.