How to Come to Terms with Market Volatility

How to Come to Terms with Market Volatility

In the light of the current coronavirus situation, a wild movement of the markets, fear of the interest rates slash, and overall panic mode, it is vital to come to terms with market volatility, relax and learn how to take advantage of it. Traders Pros is always here to share some useful insights for you to keep an eye on. Ready? Let’s begin.

It is not a secret that leading market analysts, economists, and investors expect a drastic market downturn in the near future. Let’s consider the downtrend we have watched during the last two months. Traders were giving preference to fixed income and cash investments because of the volatility caused by the Covid-19. For example, we have recently seen some of the strongest U.S. indexes dropping 10 to 12.3% which constitutes around $4 trillion. More so, the 10-Year U.S. Treasury report reached the lowest rate of 1.127%.

So, what is the best way to act in the times of the outbreak?

Stay focused, stick to the long-term trading strategy 

It’s absolutely ok to be scared by the rapid drops of the market. Remember that long-term investors have already dealt with similar situations. Stick to your plan, allow your assets some time to recover, don’t panic or overreact.

Go with the wind of change, look for opportunities that the volatile market may offer

The major question here is whether you can allow yourself to expand your portfolio with a couple of new and cheaper assets with substantial growth potential.

Rebalance your portfolio

In case you believe that the market will rebound (and there are good reasons for this), you may buy as many stocks as you may afford, while they are down with an intention to sell them, ones the rally kicks off again. 

Plan ahead!