The myth
Investment markets can be unpredictable. Even the most seasoned investors can’t always forecast what’s going to happen to the economy and how investments may perform.
With this in mind, people may worry that they won’t have any control over their money once they invest.
The reality
While you can’t foresee or control everything that may happen to your investments, you do have ways to manage risks. There are steps you can take to improve your likelihood of success amid the ups and downs.
- Understand the risks
By completing a risk assessment, you’ll know how much risk you’re comfortable taking. You’ll discover your risk profile, which will tell you the products you can consider so you’ll avoid accepting more risk than you can handle.
- Keep learning
The more you know about how investing works, the more confident you can be with your decisions. Reading articles, attending webinars, and taking lessons from trustworthy sources can boost your knowledge and make you feel more in control.
- Manage your emotions
Many investors make mistakes when they react prematurely because of how they’re feeling about market performance.
Before making investing decisions, check to make sure they’re aligned with your strategy and goals and not simply based on emotions or biases.
- Diversify
Diversifying your portfolio means spreading your money across different types of investments. This way, if one investment loses value, others might perform well, helping protect your money overall.
- Adjust as needed
Though unexpected changes happen, you can be prepared to act when you need to. Check on your investments regularly and stay updated with relevant news so you can respond to big changes if necessary.
Verdict: Partly false.
While you can’t predict market ups and downs, you can take steps to manage your investments wisely. While controlling everything isn’t possible, you can control how you respond and prepare for any scenario.
