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The latest stock market crash is the obvious reaction of investors to the corona virus, Because of the rapid spread of the virus and understandable speculation about the economic impact of the disease The financial markets have fallen into a free fall – or at least it looks like this at the moment.
For everyday investors, however, these short-term fluctuations should not affect your investment strategy. If your goals are the same as last week, your portfolio should stay the same. Here is my advice to everyone who panics about their investments.
It is never advisable to make decisions spontaneously – financially or otherwise. I had a customer who sold all of his investments in March 2009, literally the day the market bottomed out. Talk about the worst sale day. Don't let that be you!
Very little is currently known about the corona virus. We don't know how far it will spread or what potential tribute it will mean for human life. And that's really the whole point.
The sell-off is impulsive because it is a reaction to the unknown. This is not intended to minimize the potential chaos that the corona virus can cause, but such fears are not uncommon in human history. We always jump back.
Now is a good time to take a step back and review the facts of your investment strategy, aside from the current hysteria. It is not easy, but it is absolutely necessary.
2. Remember why you started
After taking a breath, rethink why you are investing at all. Is it early to retire? Can you make up for it if you start late?
Has any of these goals changed due to the recent coronavirus-driven market slump? Probably not. Regardless of what happens to the current market action, you need to proactively plan your financial future. Your current actions must match everything Your long-term goals are.
Like any other crisis that humanity and the financial markets face, the corona virus and the market reaction it causes will one day be recorded in the history books. This can happen much earlier than most of us now appreciate.
In the meantime, it's important to review your original investment goals and strategies. Unless you're doing something that isn't compatible with these plans, you shouldn't have to take radical action.
If you are having difficulty processing events that unfold yourself, bring professional help into the picture. Just as a patient would meet with their doctor before surgery, it might be a good idea to meet with your financial planner and have an honest conversation about where you are on your way to your financial goals.
3. Take measurable measures
One of the best ways to regain control is to take action. You don't have to do anything radical either. Sometimes it is enough to take small steps to support your existing investment strategy, to restore balance when the circumstances seem to be out of control.
If your baseline asset portfolio allocation made sense to you before the sellout, it probably has not changed. So keep them intact. Talk to your financial planner if you think your investment strategy needs to be adjusted. Otherwise, you should leave things alone.
Investing and managing your financial future requires a lot of patience and careful work, but should also be fun. After a thorough review, it's time to take your breath away and enjoy the things in life that matter to you.
As troubling as it all seems, it is perfectly normal for the stock market to rise and fall – and we all have to be emotionally and financially prepared for that.
Plan to keep your electricity going long-term investment strategy, Make some small changes in your portfolio that will help you get a sense of control when you need to. Other than that, there's nothing you need to do now, since you didn't do it a few weeks ago.
Jeff Rose is an entrepreneur who has disguised himself as a financial advisor, author and blogger. Jeff is an Iraqi combat veteran who served in the Army National Guard for nine years, including a 17-month assignment in Iraq in 2005. He is known for his award-winning blog GoodFinancialCents.com and book "Financial Soldier: Take responsibility for your money and invest in your future"He is also the founder of Wealth hacker labs, A movement to teach accelerated wealth creation strategies to future generations.