Focus on what you can control
When volatility increases, we encourage you to focus on what you can control:
- create an investment plan that fits your needs and risk tolerance
- diversify your portfolio, globally
- manage expenses, turnover, and taxes
- stay disciplined through markets ups and downs
The financial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and historically, over long periods of time the equity and bond markets have provided growth of wealth that has more than offset inflation.
Holding securities across many market segments can help manage overall risk. But diversifying within your home market may not be enough. Global diversification can broaden your investment universe. You never know which market segment will outperform from year to year. By holding a globally diversified portfolio, investors are well positioned to seek returns wherever they occur.
Manage your emotions. Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions.