Tips for a Volatile Market

We certainly have seen a tremendous amount of volatility in the marketplace since 2008. With markets gyrating wildly, emotions tend to run high and sometimes people unfortunately make decisions based on emotion and ignore what’s in their best interest.

To that, we would like to provide some reminders to help keep everyone on track while we are experiencing difficult times.

  1. Don't ignore, but be mindful. As you know at Garabedian Wealth Management Group we do not ignore what the markets are doing in making investment decisions, but we are certainly mindful and continue to take a long-term outlook as to what we feel is best for each client’s individual situation. As you have experienced, we do not simply maintain a buy and hold strategy, nor are we running for the doors with a fire sale when we experience problems of downturns in the market.

  2. Keep your focus whether it’s your personal life or your financial situation. It is important in difficult times and challenging environments, to stay focused so that again you are working towards the goals you and your family have in place.

  3. Be proactive. Whether that’s making an investment decision, or a decision to get out of a particular investment, even though you may have a capital gain or a capital loss. Sitting idle and doing nothing is not in your best interest. Don’t say you are diversified, be diversified. The idea of someone owning 50 stocks does not necessarily mean they are diversified—as we have unfortunately seen in the overall markets. Many stocks has been hit hard by the turmoil in the markets. You need to be diversified across asset classes and sectors and investment type.

  4. Watch your expenses. While this may be a touchy subject, one thing you can to do to enhance your overall financial portfolio and picture is to be mindful of your expenses. This does not mean stop spending, but perhaps cut back or take a less expensive alternative. Instead of going out to eat all the time, eat in more often. When you are traveling and have to run errands, do them in bulk.

  5. Enjoy life. Again this does not mean you stop spending money. You still need to celebrate the achievements and milestones in your life. We should not in rough times completely batten down the hatches, close up the windows and stay inside.

  6. Seek opportunity and be well positioned to take advantage of opportunity. In this market, we do see some opportunities. We need to stay limber and liquid enough with our investments so we can exit and enter positions when needed.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not ensure against market risk.