NEW YORK – If you’ve turned on the news or checked your portfolio, you’re aware that the stock market is having a rough year. But while investors may not be able to control the external factors driving stock prices down, they can control their own investment strategies and how they decide to respond to the situation. Whether it’s seeking out alternative assets through a platform like Yieldstreet or investing in crypto while the prices seem attractively low, investors have a number of options when it comes to reacting to a volatile market.
Here are a few approaches to consider:
Don’t Panic – When stocks keep falling, many investors struggle to control their emotional reactions to the volatility. Frustration can gradually evolve into fear, which in turn can result in an outright state of panic. But while it’s perfectly natural to be uncomfortable with your portfolio losing its value, sometimes the best approach is simply to hold tight and wait patiently for the market to turn around. After all, the stock market is famous for dramatic fluctuations and sell-offs in times of economic uncertainty, but it’s also famous for its ability to eventually bounce back. If you have a long-term mindset and haven’t invested more than you’re willing to lose, it could be best to sit back and stick to your original plan.
Buy the Dip – The phrase “buy the dip” becomes incredibly popular during periods of high volatility, and for good reason: when stocks move rapidly to the downside, many investors view it is an opportunity to buy assets at what they perceive to be discounted prices. While this strategy comes with a certain amount of heightened risk, it’s also true that investors tend to overreact and give in to selling pressure when the market is down, often leading to a near-term correction to the upside. If there is a company that you believe is undervalued or has considerable growth potential in the long term, it might be wise to add to your position while the price is still relatively “cheap.”
Explore Alternative Investments – Investors don’t need to limit themselves to the stock market, and in fact, one of the smartest decisions an investor can make is to add diversification to their portfolio by investing in alternative assets. Asset classes such as real estate, art, and even cryptocurrencies can behave differently from the stock market in times of high volatility, and online platforms like Yieldstreet have made it easier than ever to gain access to alternative investments. Investors looking to add multiple alternative asset classes to their portfolio can get started with Yieldstreet’s Prism Fund for as little as $500, or those looking for an introduction to cryptocurrency can add index-like exposure to top digital assets by investing in the recently launched Enhanced Crypto Fund. Whichever route you choose, alternative investments can be a great addition to your portfolio when the stock market continues to fall.
Source: Yieldstreet
