When the markets enter periods of volatility like we are experiencing now, investors typically feel either “bullish” and hold on tight to their investments or “bearish” and sell their assets as quickly as possible. However, regardless of whether we are in a bull or bear market, there are steps investors can take to safeguard their wealth during periods of market swings. Fortune turned to Daniel Tolomay, chief investment officer at Trust Company of the South, to learn more.
According to Tolomay, one tactic he recommends is to NOT time the market. Despite what many so-called “experts” may say on television screens or in news articles, the stock market is too unpredictable to ever time effectively. As a result, by trying to time the market, you may miss out on returns by selling too quickly or by avoiding investing altogether. “Rather than timing the market, focus on time in the market,” Tolomay tells the publication. “Investors often fear that the market will fall if they invest, but the opposite is also true: What if you don’t invest and the market rises?”
Instead of selling if you are feeling uneasy about the markets, you may want to consider diversifying your portfolio. By diversifying the mix of assets you hold, you will be able to stay the course while also minimizing risks from different macro factors if a downturn occurs. “Decide on an asset mix that’s right for your goals and risk tolerance – not based on what the market has done or what you think it’s going to do – and stick to it,” says Tolomay.