Friday, March 6th, 2020
We are in for a bumpy ride in investment markets. These are the times when experienced investors make money while others lose. Being able to understand volatility and how to use it as an opportunity is a key skill that will bring financial rewards. It comes from being a confident investor who is prepared to see things objectively rather than being swayed by emotion. When markets are volatile, logic goes out the window for the fainthearted. When is the best time to buy shares? When prices are low, of course. Nervous investors buy at market peaks and sell in the troughs and then wonder why they have had a poor investment return.
It needs to be remembered that volatility is what creates investment return. Without volatility, there would be no gains. Over time, there are more ups than downs, resulting in a positive return in the long run.
There are four important principles to remember when investing in volatile times.
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