If the last few years have taught us anything, it’s that life is unpredictable. And that holds true for your financial life, as well. Based on what you hear on the news or read in your retirement account statements, you could be feeling really good about your financial situation one day and filled with worry the next.
In March of 2020, the S&P 500 lost 645 points in 13 days, then gained 995 points over the next two and a half months. More recently, the same market index rebounded 693 points between mid-March and mid-July 2023, after losing 712 points between mid-August and the end of September 2022.
The example above is a perfect illustration of market volatility, defined as frequent, dramatic price movements, either up or down. While market volatility is unsettling, it’s important to remember that it’s a normal part of investing. And the worst thing to do when you experience volatility is to panic. Instead, experts recommend focusing on these approaches:
While it can be scary to see large — or even small — losses in your retirement account, keep in mind that market volatility is a normal part of investing. Remember not to panic, check that your account is well diversified, and focus on the long-term. It also helps to have an emergency savings account available. Following these tips will help you ride out market ups and downs like a pro!
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