Understanding risk and market volatility
When times are uncertain or the stock market is volatile, I will inevitably get asked by someone if they should get out of the market all together. My answer is no. Stocks are a valuable part of your investment portfolio. Owning stocks in different companies can help you build your savings, protect your money from inflation and taxes, and maximize income from your investments. In times of market volatility, there may be an opportunity to invest more and capitalize on the dips that occur when stocks are volatile. At Safe Harbor, we believe with any investment, it helps to understand the risk/return relationship and understanding your own tolerance for risk. In addition to risk tolerance, it is important to understand diversification of your portfolio, which is one of the most important component of reaching long-range financial goals while minimizing risk.