The financial markets can be a thrilling rollercoaster ride. One day, you’re soaring with the bulls; the next, you’re bracing for a bearish plunge. But for some investors, these downturns aren’t a cause for panic but a signal to buckle up and get strategic.
It’s during these volatile times that the saying “when the markets get rough, the tough get going” truly resonates.
Why volatility shouldn’t discourage you
Market fluctuations are a natural part of the investment cycle. While a downturn can be unsettling, it doesn’t signify the end. History shows that even the most severe corrections eventually give way to recovery. The key is maintaining a long-term perspective and avoiding making impulsive decisions based on short-term fear.
The savvy investor’s playbook
So, how do you navigate rough markets like a seasoned pro? Here are some key strategies:
- Discipline is your best friend: Stick to your investment plan, even when emotions run high. Don’t let panic push you into selling off at a loss.
- Embrace the opportunity: Downturns can present excellent buying opportunities for quality stocks that may be temporarily undervalued.
- Rebalance, don’t panic: If the market volatility has thrown your asset allocation off track, rebalance your portfolio to maintain your desired risk profile.
- Focus on the fundamentals: Don’t get caught up in the daily noise. Look at the underlying fundamentals of the companies you invest in. Are they financially sound with strong long-term prospects?
- Stay informed, but don’t obsess: Keep yourself updated on market trends, but avoid making decisions based on fleeting news headlines. Remember, NEGATIVE NEWS SELLS!
Remember, the toughest aren’t always the risk-takers
Being tough in the market doesn’t mean being reckless. It’s about calculated risk management, emotional intelligence, and the discipline to stay the course. It’s about recognising opportunities when others see only threats.
Embrace the challenge
Volatile markets can be daunting, but they can also be incredibly rewarding. By adopting a strategic approach, maintaining a cool head, and focusing on the long term, you can use these periods to your advantage and emerge even stronger as an investor. So, when the going gets tough, remember, the savvy get going – and they get rewarded.
Stay close to your financial advisor and approach them when you start feeling panicky in choppy markets.
MARIA is a CERTIFIED FINANCIAL PLANNER®️ professional, a member of the Financial Planning Institute of SA and is fully qualified to give advice on all investment matters.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
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