The Russian-Ukrainian war, poor financial performance and the prospect of aggressive interest rate hikes by the Federal Reserve, U.S. stocks suffered a massacre on Friday (22nd),Dow JonesIt plummeted by nearly 1,000 points, the worst single-day performance since October 28, 2020. Many financial experts suggested that investors can do three things during times of market turmoil.
The VIX, the fear gauge, surged more than 24% to above 28 on Friday, well below its long-term average of 20.The recent weakness in the market has unnerved many investors, with many adjusting their portfolios, pulling money out of the stock market and toward buyinggoldand the U.S. dollar, though, multiple financial experts suggest three things investors can do during times of market turmoil.
First of all, don’t rush to admit loss and kill. Chris Weston, head of research at Pepperstone, called on investors to calm down. Trading at the moment is not for everyone. It requires investors to focus on what is market noise, what are buy and sell signals, and control their emotions.
Bankrate.com financial analyst Greg McBride believes that volatility and corrections are the norm in investment markets, and with the Federal Reserve starting to raise interest rates this year, it will not be as easy to beat the market as it has been during the easing period of the past 18 months.
Jacob Channel, senior economic analyst at LendingTree, mentioned that usually in the event of a stock market slump or market instability, the best course of action is usually to leave the money where it is and never lose out. For those investing in index funds or stable companies For investors, in all likelihood, their investments will rebound.
Then there is the review of the portfolio. In an environment of great inflation, stocks have seen a clear rotation, and David Haas, president of Cereus Financial Advisors, said the market downturn is a good opportunity to review the portfolios investors have to see if they still reflect their target allocations.
Finally, buy the dip. Stocks are cheap right now, and according to Charles B. Sachs, chief investment officer at Kaufman Rossin Wealth, now could be a good time to buy, depending on the investor’s age and time frame.
Alana Benson, an investment expert at NerdWallet, said that if investors have enough cash, don’t waste too much time now. Waiting for the perfect time to enter the market may not be the best strategy, because investors may never be able to buy the perfect lowest price in their hearts.