Flying through turbulence – Market volatility

Tips to minimise exposure when investing…

If you don’t want to feel the sting of volatility, there are a few things you can do to minimise your exposure to it. Keeping in mind, the more you avoid it, the further you slide down the risk scale and the more potential returns you might sacrifice.

  1. Diversify your portfolio – It’s good practice to make sure your investment portfolio is fit-for-purpose. In the Managed Funds world, a varied mix of asset types ranging from high-risk to low-risk could help you weather the volatility storm.

  2. Dollar-cost averaging/Regular investment plan – This is a strategy that involves investing small amounts over time as opposed to one lump sum, meaning you would feel less of the effects of market volatility.

  3. Consider Managed Funds (if you aren’t already) – Managed Funds, by construct, are a way of diversifying your investments. That being said, you’ll no doubt still experience volatility; however, it might seem more palatable.

  4. Be patient and don’t panic – Historical data shows that investors with a longer time in the market naturally see higher returns over the long-period and are less subject to negative volatility effects. As much as you’ll be tempted to sell when things take a dip, sticking it out could be the better option.

Read the FULL ARTICLE to put these into context.

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