Discipline during Market Volatility

October 12, 2011 - Walid
Stock market volatility is a fact of life but it doesn’t have to derail your well thought out investment plan. High volatility can understandably make investors nervous; however, building long-term wealth requires the mental fortitude and discipline to control one's emotions and avoid potentially costly investment mistakes.
Particularly during market turmoil, many investors make the mistake of judging investments designed to reach long-term goals by using short-term performance yardsticks. Short-term performance, however, should not be the sole measure of an investment’s long-term prospects.
Other investors react to downturns by pulling out of the market altogether, with the intention of getting back when the market recovers. Too often, this leads to a “buy-high, sell-low” approach — the exact opposite of what investors seek to achieve. Research shows that asset allocation, diversification, dollar-cost averaging and investor behavior are critical to long-term investment success.
As with all investments decisions, investors should consider their goals, objectives and risk tolerance before investing. AC: 0911-5130

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