Invest More Confidently in Volatile Markets
By Saghir A. Aslam
Rawalpindi, Pakistan

 

(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)

Wells Fargo Investment Institutes shares top strategies for weathering economically turbulent times.

When the financial market fluctuates, perhaps in reaction to world events, inflation or changes in interest rates, even the calmest investors can start to question their financial strategies.

But a volatile market can present opportunities to review and reaffirm investment strategies, says Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute.

Financial markets are frequently volatile that’s their nature, even so, during periods of uncertainty investors may start to question their investment decisions. Having a plan in place can help provide the guard rails to help steer through and beyond the volatility.

In addition to reaffirming and focusing on your plan, here are some strategies you can use to help weather economically turbulent times.

Match your investment to your time horizon

One way to feel more comfortable about your investments is to align them to your financial calendar, no matter what happens in the financial world this month or year.

For example, do you need some of your money fairly soon, or want it close at hand in case of an emergency? If so, McMillion says you could consider investment such as cash holdings and short-term bonds that historically have held their value over the short term.

On the other hand, if you won’t need some of your investment money until you retire multiple years in the future, equities to longer-term bonds are worth a closer look. Those investments carry more risks but also offer potentially better returns.

Know what to expect from your investments

Some investors lose confidence because they don’t fully understand how their investments work. In that case, some knowledge of typical asset behavior is a good thing.

Consider reading up on different type of investments and asking questions of your financial advisor. Once you know how your investments are more likely to perform in certain financial markets, you can help ensure what your investment strategy is in line with your tolerance for risk.

Tune out the noise

By “noise,” means the constant barrage of financial reports and other news events from the 24/7 news media. Investors usually don’t need to react to the everyday financial news, no matter how topsy-turvy things may seem, keep your long-term goal in mind.

Regularly revisit your plan

There is no such thing as a completely set-it-and-forget-it investment strategy, it's always smart to check in regularly with your investment advisor.

Your life circumstances may change, or your financial goals could shift, you’ll feel much more confident that your investments are doing their job if you review them regularly with your advisor.

(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr. Aslam does not have anything for sale. Saghir Aslam has dedicated himself to social welfare activities since 1965 and serves as the founding chairman of Saba Homes, honoring and empowering the orphans.)