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5 Steps for Dealing with Market Volatility: Stay the Course

5 Steps for Dealing with Market Volatility: Stay the Course

Market fluctuations can be unsettling and prompt all of us to begin questioning our investment decisions. Throughout the markets’ ups and downs, here are five key points to keep in mind when investing for the long term.

1. Avoid panic selling or trying to “time” the market.

Avoid turning what may be temporary market declines into permanent losses. We know that timing the market has proven to be almost impossible. No one can guess when the market will reach the high and low points at which one would ideally want to sell or buy.

2. Diversify your portfolio.

By doing so, you can spread your assets across investments that tend to perform well at different times. Building a diversified portfolio of stocks, bonds, cash, etc., may allow you to lower your risk by reducing overexposure to any one type of investment. In addition, it is important to spread investments across various sectors of the economy.

3. Invest regularly.

By investing the same amount each month, you have created a disciplined method of investing. This allows you to spread your purchases over many parts of the market cycle and helps you mitigate risk.

4. Focus on long-term goals.

We cannot control short-term volatility in the markets — but we can control our reactions. Try to remember why you began investing in the first place and keep your objectives firmly in mind.

5. Talk with your financial professional.

A financial professional can help you review your investment plan to make sure you are invested appropriately and on track to meet your goals.

This material is being provided for educational and informational purposes only. D.A. Davidson & Co. is a registered broker-dealer and registered investment adviser that does not provide tax or legal advice. Information contained herein has been obtained by sources we consider reliable, but is not guaranteed and we are not soliciting any action based upon it. Any opinions expressed are based on our interpretation of the data available to us at the time of the original article. These opinions are subject to change at any time without notice. Copyright D.A. Davidson & Co., 2022. All rights reserved. Member FINRA and SIPC.


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