In volatile market times like we are seeing right now; it is easy to get stressed about the stock market. In addition to the market volatility many have stress about their jobs and health making it different than financial stress’s in the past. We recommend to stay calm and collected during times like this, here are several points that we think will help reduce stress.
1. Take a Deep Breath and Exercise
Before making any large decision, we always recommend to get in a headspace that allows good decision making. Speaking with many psychologists and behavioral experts, focusing on breathing and getting appropriate exercise will aid you in making calm and rational decisions. In stressful times it becomes easy to just want change and that can lead to decision that are made too fast and can hurt you for the long haul.
2. Have a Plan
It is important to have a fully constructed financial plan. We typically recommend by starting with a budget and look at what is spent on necessities vs. discretionary expenses. In times that are tough it can be beneficial to scrutinize your discretionary expenses and work to cut back on them.
3. Have a Diversified Investment Portfolio
Asset allocation is very important with investing, this means having a portfolio that may have stocks, bonds, real estate or other assets. Typically, a diversified portfolio can reduce volatility in your investment portfolio. In addition to this remember when you need the assets from your portfolio – stocks have been very good long-term assets and are designed for longer term growth. Having a strong emergency fund to cover near term expenses can help alleviate a lot of stress by being readily accessible if you need it.
4. Don’t Watch the News All Day
We live in a world that is so connected, which has many great benefits but can also have drawbacks of not being able to tune out bad news. Looking at news headlines and then going home to see many of the same articles pop up on social media can create a very negative feedback loop. It can be helpful to step away from all of that for a while and focus on some activities you enjoy.
5. Get in the Know
In general, having greater knowledge assists in creating confidence in your decisions. There are many great education platforms out there where you can learn more about personal finance and the markets to gain a greater understanding about the market cycles and why you have a certain plan in place.
6. Talk to an Advisor
In times of stress it is always helpful to reach out and talk to someone. Financial Advisor’s can serve as a coach during periods of volatility and can help guide through tough times to make sure you stay on track.