With the widespread outbreak of the coronavirus, markets are reacting to the impact on the global economy. Financial markets can be subject to periods of event-related volatility that may leave you feeling anxious with your investments, but it’s important to keep in mind that time in the market beats timing the market. Also, consider the time horizon you have for your investments.
There are three key things for you to remember during times of market volatility:
1.Volatility is a normal part of long-term investing.
It’s important to take a step back during volatile times and keep an open mindset. By accepting short-term volatility, you can stay focused on long-term investment goals and take advantage of lower prices.
2. Market corrections can create attractive opportunities.
Corrections are a normal part of the stock market. They can be good opportunities to invest in equities as valuations become more attractive, which will give you the potential to generate above-average returns when the market rebounds.
3. Avoid stopping and starting investments.
If you remain invested, you will likely benefit from the long-term uptrend in stock markets. If you try to time the market, and stop and start your investments, you run the risk of hurting future returns by missing the best recovery days in the market.
Above all, the most important thing to remember is that your existing investment plan likely considers stock market volatility and has been carefully designed with your personal goals in mind.