🚨 Stock Market Panic is Back! 8 Tips to Survive the Volatility & Save Your Money! (Updated Replay)

How do you invest in a market like this? I mean, can you even make money when the stock market is this volatile? Well, on today's video, we're going to answer that question. Hey guys, it's Ahmad and Christina from Our Rich Journey. On today's video, we are talking about stock market volatility. If you have been watching the stock market since the year began, the stock market has just been going crazy. And with all this volatility, we often get the question, how do you invest in a market like this? Well, on today's video, we're going to answer that question. We're going to give you guys some tips to help you invest better during a volatile stock market. So I really think that investors, especially new investors, tend to question their type of investment approach during stock market volatility. So this video is going to be addressing all of your concerns. But first, we want to really define what is stock market volatility. So stock market volatility is rapid price swings in a stock or the overall market. It's going up and down very quickly. And like Ahmad said, we are seeing a lot of that in the stock market, especially this year. So we have eight tips for how you can deal with volatility in the stock market as it relates to your specific portfolio. And we are going to start with tip number one, which is to reassess your risk tolerance. So when we say reassess your risk tolerance, we're not saying panic. We're not saying sell at a loss. We're saying take a look at your portfolio during times like this and do a self-assessment of how you feel. Because if you are going to be investing for the long term, there will be many more moments when you see your portfolio move like this. And if you have devised a portfolio that you feel uncomfortable with at times like this, maybe you have investments that don't align with your actual risk tolerance. So because of the volatility in the market, this is a great time to really reassess your level of risk tolerance. A lot of times when the market is doing well, when everything is going up, everyone is really happy about performance. They think they have a super high level of risk tolerance. But when you start to begin to see that fluctuation, that volatility in the stock market, anxiety can creep in. And if this is you, if you are feeling anxious with this volatility in the market, now is the time to really reassess your level of risk tolerance and make sure that your portfolio, your investments are aligned properly with the accurate level of risk tolerance that you're And this leads us to point number two, consider whether or not your portfolio has enough defensive assets. And what we mean by this are assets that don't have as much volatility and are really in your portfolio to sustain your existing balance. So U.S. Treasury bonds and high grade corporate bonds, these types of bonds reduce the volatility in your portfolio. So if you are too extreme with equities, you may want to look at bonds because that will reduce the swing in your portfolio. And again, I really want to stress that now is not the time to panic or to sell at a loss. But if you assess your level of risk tolerance and realize that it's lower than what you expected, you can begin to direct more of your money towards defensive assets in your portfolio. Our next tip is to think about how much money you've contributed to your investment, paper losses and percentages. Now, what I mean by this is let's assume that you invest, you contribute one hundred thousand dollars into an investment and that investment goes up to one hundred and fifty thousand dollars. And then right after that, it drops down to one hundred and twenty five thousand dollars. A lot of people like to think, oh, my gosh, I just lost twenty five thousand dollars. But that is not the way you should be thinking. Instead, you need to think that your initial investment was one hundred thousand dollars and now it is one hundred and twenty five thousand dollars. That is a twenty five percent increase in your investment. But let's consider if you're actually losing money, if you have a paper loss on your account balance. Let's say you start investing with one hundred thousand dollars. And right after that, it goes down to ninety thousand dollars. People tend to think, oh, my goodness, I just lost ten thousand dollars. But there's two things to keep in mind. First, you don't lose unless you sell. It is just a paper loss. And the other thing is to stop thinking in terms of dollars and start thinking in terms of percentages. So rather than thinking I have a paper loss of ten thousand dollars, you need to think I have a paper loss of 10 percent. And the reason for this is that we have a really strong emotional connection to money when we are thinking, oh, my goodness, I lost ten thousand dollars versus I lost 10 percent. It's a lot more anxiety provoking when you're thinking in terms of dollars. I mean, no one likes to lose money. If someone told you that they lost a thousand dollars, that would sound terrible. But if they told you that they lost one percent, that doesn't sound as bad. See, it's these psychological things that you must think about when you're investing so that you control your emotions. Our next tip is to continue investing and preferably continue investing automatically. At times like this, you may feel the need to jump in and out of the market and try to time it. This is the worst thing you can do. By consistently investing the same dollar amounts that you have been investing in the past, you can consistently capture the average return of the market. You see, when you are jumping in and out of the market, you can miss key days in the market. Have you ever noticed that when the stock market falls significantly, it usually rebounds significantly and in some cases goes even higher? Well, if you are jumping in and out of the market, it's hard for you to determine when those days will actually be. But by consistently investing in the stock market and in fact, consistently automating your investments in the stock market, you're allowed to capture the ups and downs. But usually over time, those ups and downs average out to be positive when you're talking about investing in the total stock market. Another thing about automating your investments is that by doing this, you're less likely to constantly check on the performance of your portfolio. Again, the idea is to remove emotion when you're investing. So automation helps by doing that. Our next tip is to keep in mind that volatility presents opportunity. A lot of people see volatility and they think it's automatically a bad thing. But there is a lot of opportunity with volatility as well. And I'll give you an example. Think about what happened in March of 2020. There was so much volatility in the market at that time. People who got out of the market missed a great opportunity to continue investing and to grow their money to great lengths. Our next tip is you must have a long-term perspective. Now, if you are watching the market on a daily basis, it looks like a very volatile thing. In fact, if you looked at it over the past three months, it looks terrifying. But when you zoom out and you look at the stock market over years and years, over decades, these months will look like little blips on the history of the stock market always going up. And we say this all the time because throughout the history of the stock market, throughout all the volatility, if you look at any chart of the stock market, it always goes in one direction and that is up. But realize that on its way up, there will be moments like this where you have tremendous volatility. But for anyone that is a long-term investor, that volatility will just be a blip on their building wealth journey. And this brings us to point number seven, that investing has to be a part of your wealth building strategy. You cannot save your way to financial independence. You have to put your money to work. There's a saying that I just love and it is scared money don't make money. You see, when you invest, you are taking on some sort of risk, but with the belief that you will get a return on that risk. So yes, it can be scary. Anything can be scary in life, especially when it involves money. But if you're trying to build wealth, you must accept the fact that investing involves risk. So this risk can actually be very scary. It can induce fear. But one way to mitigate this fear is to really educate yourself. So become financially literate. Take the time to understand how to properly invest in the stock market so that you can grow your wealth. Now, if you are new to investing or you want to learn more about investing, we actually have a stock market investing course that's aimed for people that are interested in pursuing financial independence and retiring early. So if you want to learn more about that course, we will leave a link in the description below or you can go to our rich journey dot com. So our last tip to you, let's say you went through all of the seven tips and you still feel some level of anxiety with the volatility of the market. Our tip to you is to diversify your investments. So maybe you invest a little bit in the stock market, but you also take some money and you invest in a business, for example, or in real estate. This way, by diversifying some of your investments, you can help to reduce some of that anxiety associated with investing in the stock market. So those are our eight tips for investing in a volatile market. Again, like we said, if you're interested in learning more about investing in the stock market, make sure you check out our course in the link below or go to our journey dot com. But for this specific video, if you like this video, make sure you give it a thumbs up, subscribe to our channel and join the journey.