The volatile stock market has triggered many opinions and discussions as to whether investors should worry about today’s market. While you have enjoyed quite a victory ride possibly given the strong gains in 2019 out of biggest dip in December 2018 if you have stayed with the stock market, will this be lasting and should you worry about your investment?
Here are three things I use to manage a time like this:
Know where you invested in
Diversify between American companies and developing country companies not only helps to offset some risks in international trade, developing countries are growing at much faster rate and return is stronger.
Know the industry trend and ride those uptrend segments. There are general society movement such as retail struggling and e-commerce gaining momentum. There are political impacts such as oil and national defense industry.
I believe that world is moving to a direction of nonetheless. If clean energy is what world is moving into, it won’t stop just because of some hiccups. People tirelessly help poor to feed, clothe and house. Environment protection is on vast population agenda. Tesla is a great example. Its success is a society supported trend.
Check the stock curve and know which price point you get in. The market has been growing and you certainly did not need much work to enjoy some profit. Now it is time for you to re-look at the history chart and see if your investment is at the price point that is either below or at the supporting point. If it is above supporting point, you might need to think about if you should take part of profit to ensure portfolio wide return. Even in a perfect market, you could pick a wrong price point to invest.
Prioritize your money to the place that gives you the most peace of mind first
Prioritize your money to where the interest rates are high, like your car payment or credit card. I would say to avoid credit card debt by all means. Credit card debt typically is created due to over-spend unless there was emergency medical needs. Live within your means so that you don’t pay for a high price for your spending spree.
To many women like myself as a single mother, to ensure a roof over our children’s head is the biggest peace of mind we need. If this is the case for you as well, prioritize your house payment no matter how low the interest rate is. To have a healthy mentality creates steadbility, which in turn strengthen your decisions in other perspectives of your lives.
We tend to think that we have a plan to handle risks in case it coming, but a lot of times, as the boxer Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” If your mortgage and child care are depends on your investment, adjust your portfolio into some mutual fund and high performance stocks. Some stocks out there are so easily to be identified as lower risk ones. So far Facebook, Amazon and Apple are all trending steadily.
Evaluate your entire portfolio
Where are your 401K being invested in? Do you own rental property? Is your own house equity growing? All your investments matter as a whole. Check on them and see if you have your basics covered and safety net. Prioritize your needs and know when you need to meet them. There are lots of things that could move the stock market directions, which is on a positive momentum. Check how your entire portfolio moves will help you decide what risk level you can tolerant.