7 Ways to Navigate Market Fluctuations

Here are a few financial steps to consider when the market fluctuates:

1. Stay the course.
   As is often the case with rapid drops in the equity markets, by the time someone is thinking about getting out of the equity markets, the damage from the panic selling has already taken place. But keep your long-term plan in mind. Moving to bonds could potentially be bad timing as the interest rates have dropped sharply to new all-time lows, which means that as they start to rise again, bonds could lose value quickly.

2. Don’t overreact.
   It’s normal for us to worry when the market falls. We often want to sell when the market is low and buy when it is high. Fluctuations will happen. It’s important for you to evaluate the situation before making any rash decisions.

3. Delay moving some portion to cash.
   Although this may feel safer in the short run, it may cause you to miss the recovery when equity markets turn back up again, which will eventually happen.

4. Diversify your investments.

   Diversification is the process of spreading your money among different kinds of investments. All investments have specific characteristics including what is being invested in, the volatility of the investment, and the strategy for picking each investment.

   This is a good investment strategy. Putting your money into a variety of investments does not mean that your investments will not go down in a declining market. But it does mean that you have a better chance to reduce the risk.

5. Prepare for Contingencies

   If you have not done so already, fuel an emergency fund with enough money to cover at least six months’ worth of basic expenses. This cushion helps keep you solvent after a layoff and prevents you from borrowing your way out of a crisis. The key is to have access, not necessarily cash on hand, for up to 6 months’ worth of expenses.

6. Consider refinancing higher interest mortgage loans. If you have a mortgage loan, now might be a great time to consider refinancing that mortgage as interest rates are now at all-time lows. 

7. Seek guidance from your financial advisor.
   It’s often hard to think logically during this time, but your advisor will give you sound advice. If you’re feeling worried, take the time to talk to your advisor about your concerns. Click here to schedule an appointment with an Envoy Advisor or call us at (888) 879 – 1376.

In addition to the financial stress, there is the emotional stress too. This emotional stress is another area where Christians have an advantage—we know the source of peace that passes all understanding. During hard times and market fluctuations, remember Isaiah 41:10. “So do not fear, for I am with you; do not be dismayed, for I am your God. I will strengthen you and help you; I will uphold you with my righteous right hand.”

Do you have a question and need a quick answer?
Check out Envoy’s Help Center, which gives you access to wide range of frequently asked questions. Or, give Envoy’s service team a call and they’d be happy to help you find your answers.