The Chinese New Year started in February in 2016 and this time around it is the year of the monkey.
In Chinese culture the color red symbolizes good luck and people would use it to keep evil spirits and poverty away.
So when it comes to the stock market the beginning of this New Year has been a very volatile event so far and the big question is what someone can do to not end up worrying about what their statements will look like next week, next month or even a year from today.
Here are 3 basic ideas on how you stay sane and how you can better stay invested without worrying about daily market movements.
Understand your timeframe
If you are investing for your retirement that may be 15-20 years away you may not need to worry about what the market does today, tomorrow or potentially not even how it has performed as the year of the rooster comes around about 11 months from now.
You should make sure that your allocations fit your timeframe and make sure that you stay invested so that you can achieve the best possible rate of return on your portfolio.
If you are approaching your retirement make sure that you have a great understanding of all your assets and understand where your retirement income for the first years is going to come from.
Also as always make sure your risk profile matches up with how your portfolios are built.
Have more than one type of portfolio.
When you invest it may be beneficial to create multiple investment portfolios so that you have more than on timeframe for your investments.
If you are saving for your kids retirement and college at the same time there is a great likelihood that these accounts should not be invested exactly the same way.
So build more than one portfolio and build them around when you expect to be accessing the money.
Build short term savings.
Create an emergency fund that you can access at any point in time and build this emergency fund in a way so that it is not tied directly to the volatility of the stock market.
Make sure that you start building this short term savings so that you can live of it for at least 4-6 months.
Article Written by CreativeNurse Team