During the global economic slump, there’s a lot of bad news right now and many people are saying that you should put everything into savings. Do you think that’s really the smartest move? Are saving accounts the best option to reap more money?

7-strategies-handling-volatilityIn my opinion, we should not stop investing because when times are bad, we’re getting cheaper assets ( Unit trusts, stocks) and should not be panic as investment is a long term business.

Here are seven key strategies to help you handling the volatility of the financial markets.

Do not panic and stay calm

Always remember what is your purpose for investing and why you invest in the first place? Once you know that, you will understand that the short period of market volatility is not a trouble to your long term investment strategies.

Diversified Investment Portfolio

Investors must understand that all types of investments carry some risk – low, moderate or high. However, investing in diversify portfolio will minimize the risk by spreading the risks. Thus, choosing a mix of unit trust funds which invest in stocks and bonds will help you to achieve the investment goals.

Invest Regularly (Dollar cost averaging)

Start to invest a fixed amount every month no matter in good or bad times. (actually you cannot confirm when is good or bad times) The good thing about dollar cost averaging method is you won’t risk all of your money in one goal and you do not have to guess whether now is good timing or bad timing to invest.

Invest For Steady Income

Some unit trust funds are considered as income producing funds as these funds produce a steady stream of interest payments annually to their investors. Although the dividends might not as attractive as returns of stocks funds, but in a down stock market situation, it could function as a alternative income source.

Avoid Jumping In and Out of the Market Too Frequently

Most people including the financial analysts are unable to forecast the bull markets timing and bear markets timing. It’s so hard to predict the market timing because you need to get in at the right time and getting back at the right time too. As a result, many investors end up buying high and selling low. In addition, when you jump in and out too frequently, the commission or initial fees imposed by agents also increases and not worth it.

Do Not Invest In Products You Do Not Know

As we know, investments involve some uncertain risks and if we invest in products that we do not know, the risk is high and the chance to lost the money also high. Please take the advice by the world’s richest man ( Warren Buffect) that he will not invest in any company’s stocks if he do not understand how the company works.

Get Professional Advice from Knowledgeable Financial Consultant

It’s always not easy to deal with vast volume of investment information available and make right decision according to investment needs. Therefore, find a well-trained unit trust consultant or knowledgeable financial consultant to work with. Re-look at your investment portfolio and discuss with consultant how to maximize your income but minimize the risks.

Conclusion

The global economic crisis has been the main topic of concern of everyone nowadays. Stay in control of your investment portfolios and decide what to invest and the level of risk to take. Hence, investors should be able to gain better yields by investing in the right investment tools.

  • Share/Bookmark

Related posts:

  1. Personal Finance Investing – Investment Strategies For 2010 One of the important element from the Personal Finance aspect...
  2. Financial Goals Conflict | Know Your Investment Goals If you are a smart investor who knows how to...
  3. 8 Top Common Investing Mistakes You Should Avoid Investment is same as doing business. If you make common...
  4. Personal Finance – Building An Emergency Fund What Is An Emergency Fund? Emergency Fund should contain not...
  5. Survive A Financial Crisis, Economic Crisis It is never easy to cope with a financial crisis,...

Related posts brought to you by Yet Another Related Posts Plugin.