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Tags: smart | investment | moves | markets

CNBC: 5 Smart Investment Moves to Survive Roller-Coaster Markets

investor needs a drink after the crash of the stock market

Thursday, 27 December 2018 05:44 PM EST

With the stock market on a seemingly endless roller-coaster thrill ride, financial advisers urge savvy investors to redesign their trading strategy.

After making a handful of strategic moves, you should be able to not only survive, but thrive, during the market volatility, financial advisers have told CNBC.

Selling stocks when you are upset about a marke downturn is the wrong strategy because you are trading based on your emotions and not financial facts, said Douglas Boneparth, president and founder of Bone Fide Wealth.

“Even if you’re proven to be right, you’re still going to have an extremely hard time getting back in,” Boneparth, a certified financial planner, said. “No one ever does that at the right time.”

Here are five safeguards from various advisers for times of market trouble:

  1. What goes up must come down. “A correction is not unexpected,” Boneparth said. “People need to remember that markets go up and down.” Bear markets tend to happen once every three years, according to Scott Hanson, CFP, founder and senior partner at Hanson McClain Advisors. “We haven’t had one in about 10 years,” Hanson said. “It’s certainly to be expected the market will be in a bear market.”
  2. Shop for bargains. “When markets are low, the money you regularly invest buys more shares. That puts you in a position to do well when the markets recover,” CNBC explained.
  3. Revisit your strategy and your goals. “You shouldn’t stray from your financial plan just because you’ve seen a dip,” said financial adviser Roger Ma, CFP and founder at Lifelaidout. It is a good idea, however, to check every couple of months to make sure your actual assets are still within 5 percent of your target allocation, Ma said.
  4. Assess your risks. Make sure you are not overexposed to certain areas of the market, said Diahann Lassus, a CFP and president of Lassus Wherley.
  5. Keep some cash on hand. While you do not want to sell everything and go to cash, it is a good idea to make sure you have the cash on hand that you will need over the next six to 12 months.

None other than the commander-in-chief himself agrees with at least one piece of that advice.

President Donald Trump suggested that a recent swoon in U.S. stock markets is a buying opportunity for investors, even though many analysts blame his policies and Washington gridlock for the plunge.

“We have companies -- the greatest in the world, and they’re doing really well,” Trump told reporters at the White House on Tuesday, Bloomberg reported.

“They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.”

Meanwhile, a long government budget fight and shutdown could make the markets even more volatile, economists are warning, as the showdown between President Donald Trump and Democrats over funding a border wall continues.

“What would be worrisome is if businesses start to lose confidence” in the federal government, Kathy Bostjancic, head U.S. financial market economist at Oxford Economics, told The Wall Street Journal.

“They’ll pull back on hiring, and investment, and it’ll become a self-fulfilling prophecy, where negativity in the stock market turns to negativity in the [broader] economy.”

The shutdown has left some 800,000 workers either on furlough or working without pay, but the initial effects have been deemed as small, with the shutdown falling on two weekend days and two federal holidays.

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After making a handful of strategic moves, you should be able to not only survive, but thrive, during the market volatility, financial advisers have told CNBC.
smart, investment, moves, markets
Thursday, 27 December 2018 05:44 PM
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