How to Avoid Panic in a Market Selloff
Stop watching the scoreboard!
While CNBC’s daily programming includes Fast Money Halftime Report and Closing Bell: Overtime…
Investing is not a sporting event.
Remind yourself that your portfolio is a collection of long-term investments in businesses, municipalities, real estate, and other assets.
How a stock trades today - whether it is in liquidation due to margin calls, rallying because of takeover rumors, reacting to an earnings “beat” or “miss” – has nothing to do with its long-term contribution to your overall financial health.
Focus on your goals and make adjustments based only on meeting them.
To be able to tune out the useless play-by-play, take these steps:
Have enough cash in reserve for emergencies.
Build your portfolio with your goals in mind.
Establish a mix of risky and stable assets that allows you to sleep at night.
Diversify, Diversify Diversify.
Use market volatility to rebalance.
These five simple steps will allow you to tune out when others are panicking.
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