Chicago, Illinois (PRWEB) December 19, 2011
The news media has made no secret of the fact that U.S. stock markets have been very volatile for a long span of time now, and that continued volatility is almost certainly in the cards. According to a recent Wall Street Journal editorial, the “haphazard” nature of the stock market has made it difficult for anyone but the savviest investors to truly generate profit. According to financial planner Mitch Feinberg, however, becoming a smart investor is simpler than one might think, even in trying times. “Volatile markets offer plenty of problems, but there are also real solutions,” offers Feinberg, who works for the Chicago financial planning firm Warren & Moore. “Dealing with a haphazard market is doable with a little flexibility and an adapted investment strategy.”
Continues Feinberg, “Volatile markets don’t mean one should refrain from investing, but they do make calm, level-headed thinking more important than ever.” Feinberg offers five tips for prudent investing.
Keeping a cool head and remembering a long-term perspective are the foundations for Feinberg’s five tips.
1. Review the entire financial plan: Before investing, meet with a financial advisor and take the big picture into consideration.
2. Diversify as much as possible: Volatile markets make it especially key to spread investments between stocks, bonds, and cash investments.
3. Keep emotions out of it: Don’t allow frustration or anxiety to force unwise decisions or intemperate investments.
4. Exercise self-discipline: Things like dollar-cost averaging can prove to be invaluable tools for any investor.
5. Avoid market timing: This is going to be a big temptation during volatile markets, but it is ultimately a major risk that seldom pays off.
Feinberg notes that these tips are good general ones for any market conditions, but that this level-headed approach is particularly integral during a shaky market or a tumultuous economy.
Mitch Feinberg is a senior financial planner for Chicago’s investment firm Warren & Moore, and offers investment advice to clients from across Illinois.