Stock market volatility refers to the sharp ups and downs of the stock market index. This is often dependent on many factors such as a country’s economic and political status and a change in the supply and demand of limited resources such as oil.

Here, AOG Wealth Management Inc. discusses how investors should handle stock market volatility.

What Makes The Stock Market Volatile?

It is common for many to invest in bonds to avoid the risks commonly associated with stocks. Many expect to do better by investing in stocks vs. bonds because stocks are riskier and therefore the returns can be higher. The same behavior applies to other aspects of the stock market, which contributes to its volatility. That is why many rely on experts like us when it comes to investment management in Washington, DC.

Why Volatility Hurts

Stock market volatility hurts those who lack the patience and discipline to ride out the volatility. Relying on speculation to determine when volatility will start and stop is also a risky proposition. The same applies when trying to guess the best time to start investing. If your investment timeframes are longer, you can more easily ignore the ups and downs of the stock market because you really only care how that investment will do over the longer term – 10, 20, 30 years or more. So a week or month of volatility in the long run does not matter.

What is the Best Course of Action Then?

Making an investment always entails risks. But doing nothing can be just as risky in terms of preparing for your retirement. When the stock market drops, one course of action that could be appropriate for you is to buy stocks. That’s right…when stock prices are falling they are essentially being sold at a discount. By buying stocks as their prices are dropping, you could be putting yourself in a better position for a long-term return when the market begins to move up.

It is vital that you learn to be patient and to invest for the long term. It is also safer to be conservative when it comes to valuing and constructing your portfolio. Refrain from letting personal biases like fear and greed influence your decisions. Try not to be too optimistic or pessimistic. Learning to adapt to the market’s volatile nature will provide you with more opportunities.

What We Can Do For You

We specialize in asset management in Washington, DC and the surrounding Maryland and Northern Virginia area. We provide customized investment solutions that will address your needs. This can be anything from tax-efficient strategies to reduce your tax-burden to re-allocating retirement funds to lessen volatility, or anything in-between. Our services also include:

Let the Experts Help You

You can count on AOG Wealth Management Inc. to help you manage your finances and help you plot a course for your retirement. Call us today at 1-877-600-3573 for more information about our services.