Stock Market Volatility: Should You Be Worried?

Well, here we are again. The world is once more in upheaval, which seems like a regular thing these days. There’s a major pandemic breaking out in Africa, battles across the Middle East, threats between two superpowers, and the risk of recession in Europe, China and Japan. Of course the stock market is looking at this carefully, and this means it’s doing its usual crazy dance.

The stability investors saw over the summer has now begun to fray. Swings of 200 points or more are starting to appear on a daily basis as organizations and individuals swap out money and put it back in as their moods change. This causes confusion to set in for the individual with a young family who watches or listens to any business program. On the one hand, commentators are saying the stock market is in a fragile state. On the other hand, commenters are saying this is just a normal correction for the stock market. Sometimes the differing comments come from the same people; hence the reason for all the confusion.

For someone investing their money in the market to make sure their children have a comfortable life, this is frustrating. However, there is plenty of decent news to be had. First off, this volatility is normal — the market has had plenty of ups and downs in the decades its been around. We’re not talking every day situations here, and not extreme financial circumstances like the Great Depression or Great Recession. Second, this isn’t the return of the Great Recession. This is the market doing what it does best in unsure circumstances…it’s panicking.

So, what are you to do? Here are a few tips to keep you sane.

Turn off the voices

MSNBC is going to say one thing, FOX Business is going to say another, and Bloomberg Radio is going to give you a combination of the two. Listening or watching all of the pundits in these media outlets can give you a headache. Turn them off and switch to music or a comedy show to give you a break, and don’t make contact with them again until the issues blow over.

Don’t invest in gold

Talk about volatility! Gold is the worst barometer of ongoing financial issues. Those who panic decide to invest in gold, inflating the price per ounce to an absurd amount. Once things calm down, those investors return to their normal outlets, plunging gold from its highs. Sure, gold can be part of your investment portfolio but, as your parents probably said, don’t put all of your eggs into one basket.

Ride it out

Those who stuck with their stocks during the Great Recession have made back their lost investments and then some over the proceeding years. A few days or weeks of up and down stock tickets is not going to crash the market. Stick it out through the economic storm. There’s a very good change you’ll come out ahead in the end.

One Response to Stock Market Volatility: Should You Be Worried?

  1. […] markets aren’t like traditional financial markets. With traditional markets, the market is made up of hundreds, sometimes thousands, of private companies. These companies’ […]

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