Keeping Market Volatility in Perspective: 6 Strategies to Consider During Unstable Markets
By Amanda Compton
The first half of August provided a much needed respite from the market volatility that we had become accustomed to during the summer months.
Investors clocked six straight days of market gains, giving economists hope that we had finally hit bottom and brighter days lie ahead. And with a cooling inflationary environment, the assumption was a less hawkish Federal Reserve monetary policy moving forward.
But as they say in the movies . . . "not so fast."
When it became apparent that the Federal Reserve has little intentions of loosening its policy, markets went crazy again.
"It will be interesting to see how things play out in the coming days," said Fox Financial Group's Jay Fox, CFP®. "While things may seem uneasy in the short-term, investors are not short-term thinkers. We are in it for the long-haul, which is one of the fundamental principles to building wealth and leaving a legacy to our families."
The market volatility that increased in the second quarter of 2022 will most likely be prevalent throughout the rest of the year. Contributing to this volatility are:
- A slowing global economy
- The ongoing Russian/Ukraine war
- Sluggish corporate earnings
- Massive government spending
- Rising interest rates
Despite the instability, there are some bright spots such as strong employment numbers and an increase in hourly wages. Additionally, there are strategies you can employ during volatile markets:
- Avoid making emotional decisions
- Beware of media magnification
- Re-check your risk tolerance
- Re-check your time horizons
- Focus on your goals
- Consult with your advisor before making final decisions.
"What we need to remember is that market volatility and corrections are a part of investing," noted Fox, adding, "Over the past 69 years there has been a market correction, on average, every 1.87 years. So let's keep this in perspective as we finish out 2022."
Fox Financial Group is a family-owned comprehensive financial services firm committed to helping you achieve your long-term financial goals - even in challenging times like the first half of 2022. You can reach us at 636-534-7252 or info@foxfinancialgrp.com. You can also click on this Calendly link to schedule a free consultation with Jay Fox. We would love to serve you and your family!
Investment advisory services are offered through Mutual Advisors, LLC DBA Fox Financial Group, a SEC registered investment adviser. Fox Financial Group, nor any of its members, are tax accountants or legal attorneys, and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional.