Basics Of Investing Still Apply When Markets Are Down

Fri Aug 27, 2010, 8:07 am | 17 Comments



Have a long-term strategy whether the markets are down or up. The markets get to be on the rise when investors keep buying into it, and is termed a bull market. When they start selling – for a variety of reasons, mostly due to panic – the markets start coming down, and is termed a bear market. What do you do when the markets are down? Well! whatever investors do in a bull market, they should continue to take similar steps in a bear market – be consistent in your strategy and don’t panic.

Consult your financial adviser to see how these strategies might help you:

  • Diversify…

    You need a broad mix of stocks, bonds, and cash.

  • Protect future cash flow…

    If you think you need cash in the next year, put some money in savings and money market, even if the return is presently dismal.

  • Stay consistent but flexible when need be…

    Price of gold is in the stratosphere. If you had invested in gold a few years ago, it would have given you a super-duper return. But don’t tie up all your money in supposedly crash-proof gold or deferred annuity.

  • Cut investment expenses…

    You can own a diversified portfolio with low-cost index funds. Index funds offer extremely low costs, and low tax turnover, making them a great choice for many investors.

  • Save more…

    Review your portfolio. If it isn’t growing fast enough to your satisfaction, one of the magics to apply is to save more.

  • Change priorities as you age…

    Your true investment strategy must be based on your life expectancy, and not on your retirement date. If you have a long-term strategy for investment, stick to it. You won’t lose sleep over the market’s inevitable ups and downs.

In a Nutshell
Have a long-term strategy. Don’t panic when the markets are coming down.



Related Posts On Doable Finance dot Com

  1. Dollar-Cost Averaging Is Key To Success When Investing
  2. Diversification Is Key To Asset Allocation
  3. Understand Basics Of Your Income Tax Return
  4. Tips For Investing Strategy If You Have Plenty Of Savings
  5. Tips To Avoid Most Common Investing Mistakes



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