Amid the global sell-off in the stock markets, many people who park their hard-earned money in the hopes of growing their nest-egg for retirement are visibly concerned.
Are you one of them?
When I last had a chat with my mum, who does invest a sizeable portion of her savings into the stock market, she seemed pretty chill about the whole thing.
“Mum, the stock market tanked on Monday.”
“Yeah, just let it settle first.”
“Aren’t you worried? Quite a bit of money in there leh.”
“Help me look out for what to buy, ok?”
For amateur investors, they’d likely be looking for the exit amongst the chaotic sea of red on their stock widgets.
However, my mum seems to have her nerves of steel in place during times of market volatility like these.
Pay attention to the following 3 three things – if you check them off your bucket list, you’re likely going to be able to avoid bleeding massive amounts of money in the stock market.
1) Keep Your Emotions In Check
At the time of writing, Singapore shares have fallen to the lowest we’ve seen in a year. 22 of 30 blue chip stocks on the index have seen their prices drop to the lowest level in 52 weeks.
Having held on to stocks for only a couple of years, an investor might be running for the exit, possibly leaving the gains from previous years at the door on their way out.
Not for someone who has held stocks for decades, and have weathered through cycles.
It’s easy to ask someone to calm down when the person affected is not on the receiving end. So in the words of veteran entrepreneur Mark Cuban, whose response to Monday’s selloff in the US was:
“If you don’t know what you’re doing, or you think you do but you can’t afford to lose your stake holdings, do nothing.”
On the flip side, value investors are looking out for things to buy while you’re fretting about paper losses. They can smell profit time coming, as the market is on its way down…
So if you are getting panicky about the loss you’ll make if you sold off everything now… How about gathering your wits and resolving to win when emotions are testing for the better side of you?
2) Invest In Things That Make You Money On The Way Down
Able to breathe properly without the inhaler now? Good.
While thinking of what to get at a bargain price, you might want to trade with instruments that allow you to make money on the way down…
Not sure what I’m talking about?
Forex trading is one such instrument where investors make money regardless of the direction the markets are moving.
People who know their way around forex trading are able to fill their coffers when charts are on the way up… Or on the way down.
And that brings us to…
3) Acquiring The Right Investment Skills
To build on the previous part about using the right tools to make money, let’s say you’ve decided to make money investing in forex. How then do you know which direction to trade?
Even with the right tool in hand, you’re still headed for failure if you take a potshot with your hard-earned money. Your financial well-being deserves better than having its manager blindly betting on a hunch.
Need more confidence to be sure of what you’re doing is not going to result in massive losses? Taking up courses like Forex trading help.
With the necessary areas taken care of, you can then sleep well at night with a greater degree of certainty that you are able to make money from the market whether it’s up…. or down.