You can act two ways when the market is so volatile… Here’s how to make the smartest move with your investments

Julie Brownlee, Fsp Invest, 23 Oct. 2014

Tags: investments, investing, invest, investor, investment strategy, volatile market, best investment strategy, warren buffett,

Over the last few weeks, markets have been extremely volatile. If you have money in stocks, it’s a nail biting experience.

So what should you do with your investments?

You can take one of two approaches. One approach involves listening to your emotions, the other involves taking advantage of the market.

Let’s take a closer look…

What you shouldn’t do with your investments

It’s very hard to ignore your emotions when you invest. After all, your money’s at stake.

If you listen to your emotions, chances are you’ll ignore what’s happened in the past on the markets.

You don’t have to look far back to see this. In 2008 when the financial crisis hit, many investors panicked and sold when stocks were at or nearing their lows.

What happened then left many investors too scared to get back into the market. This means they’ve missed out of a five-year rally.

And if these investors have only just got back into the market, they’ve coincided buying with a market correction.

Investors like this haven’t sold their investments just yet as the drop hasn’t been that bad. But if things get worse, they’re sure to sell, again at the bottom.

The best course of action with your investments

Savvy investors know that any market sell-off brings buying opportunities. You can get your hands on fantastic stocks at bargain prices.

Yes, there’s a chance you’ll buy a little early and see some initial losses, but if you take your time buying you can average this out.

When the financial crisis hit, Warren Buffett took the chance to buy great companies at great prices. And he’s still doing the same thing today.

Recently, in an interview with CNBC, he said he’s still buying stocks. He sees a falling market as a time to invest.

But the fact is, even though Warren Buffett acts like this when the stock market is all over the place, the majority of investors still panic. They’re too scared to invest. They just hold on.

And when things get worse, they sell, Alexander Green in Investment U explains.

To succeed in the stock market, you need to seize opportunities when stocks take a knock. Don’t act in panic.

So there you have it, how to make the smartest move with your investments when the market is so volatile.

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