Make us your home page
Instagram

Daily Q&A: What's a good strategy for dealing with the volatile stock markets?

What kind of tips do you have for dealing with the volatile stock market?

Here are some thoughts from Consumer Report's Money Adviser experts:

Following the herd. This emotional approach to investing often results in buying high and selling low, the opposite of what most of us want to do. But whether the Standard & Poor's 500 is up a certain amount or your neighbor is making a killing shouldn't matter to you. Your strategy should be based on your individual goals, time horizon, and risk tolerance, not those of your neighbor.

What to do instead. Put your investments on autopilot. Set up an appropriate asset allocation and make regular investments at set intervals, regardless of what the market is doing or pundits are prognosticating. If you're still some years away from leaving the workplace, consider target-date funds, which shift their mix of investments automatically based on your anticipated date of retirement.

Running for safety. In the aftermath of the 2008 market meltdown, many investors realized that they had too much invested in stocks and too little in bonds and cash. Some reacted by liquidating what was left of their stocks and pouring money into Treasury bonds as a safe haven. Unfortunately, that too could turn out to be a mistake. Should interest rates rise or the U.S. fiscal situation deteriorate, being locked into Treasuries, particularly long-term ones, or just having too large a bond position could mean trailing inflation.

What to do instead. Playing it safe might make sense if you don't have a long time horizon and can't wait for the market to recover. But if you want your portfolio to grow over time, you should continue to hold some stocks. If you're a bond investor, stick to shorter-term issues until the interest rate picture becomes clearer.

For more information about Consumer Report's Money Adviser, visit: www.ConsumerReports.org.

Daily Q&A: What's a good strategy for dealing with the volatile stock markets? 08/27/10 [Last modified: Friday, August 27, 2010 1:26pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]