The ongoing coronavirus crisis created many questions about the future of stock markets. Stocks around the world suffered losses due to the coronavirus and its impact on the global economy. In this situation, some people may think that the best solution is to get rid of their stocks. However, it is better to keep the stock as well as bonds. There are several useful tips on how to deal with the coronavirus crisis.
One of the tips relates to portfolio checkup. At the moment, it makes sense to review the investments as well as various financial goals.
For example, people should get rid of unnecessary fees. Furthermore, other problems connected with portfolio checkup include a lack of diversification and sometimes over-diversification.
Stocks, useful tips and market volatility
Stock market values around the world collapsed due to the fears connected with coronavirus and its impact on the global economy.
Nevertheless, as mentioned above there is no need to panic as there are numerous tips on how to deal with market volatility.
People should keep in mind that, on average, for the 12 months after the end of the bear market, a fully invested stock portfolio had an average total return of 37.1%. There are other useful tips as well.
Another one is connected with dollar-cost averaging (DCA). It is worth mentioning that, DCA is when a person puts a set amount of money away regularly into an investment or investments.
However, a person should remember that dollar-cost averaging does not guarantee a profit or eliminate risk.
Nevertheless, dollar-cost averaging makes it easier to cope with volatility. Moreover, thanks to DCA, it is possible to reduce the risk, that a person invests into stocks right before a significant drop in the current value of his or her holdings.
Thanks to several tips stated-above, it is possible to deal with stock market volatility. Thus, people should refrain from selling stocks in the nearest future.