So the markets are a little bumpier than normal right now due to the uncertainty of COVID-19 (coronavirus) and how it may affect the economy. And that has some people on edge.
While volatility and the sting of short-term losses might leave you feeling anxious, there are some ways that may help you handle the emotions that can go along with saving for your retirement.
Here are three things you can do to help you stay calm and push forward with your plans to save and invest for the long-term.
Let the markets be volatile. Focus on stability.
Market volatility can be a good thing. Sounds weird, right? When the news talks about volatility it’s usually just when the market’s gone down. But healthy markets have some volatility. They go up and down. And volatility is part of what helps allow equity markets deliver returns over time. But volatility is a short-term phenomenon.
One of the secrets to being a calm investor is focusing on a long-term plan—such as your retirement goals. Investing to avoid volatility is kind of like deciding on a flight because you think it’ll have the least turbulence. The main goal (long-term) of flying is to get somewhere far away. And when you’ve arrived at your destination, you’ve all but forgotten the bumpy ride.
The destination for your retirement saving is living the life you want in retirement—and that could be up to 30 years in the future.
Consider basing your investment choices and changes on a set of stable, long-term investment goals and your ultimate retirement date, not daily news about short-term market swings. Keeping your eye on the destination may help you ride out the bumps along the way.
Focus on what you can control with your retirement savings.
Since you can’t control market volatility, it’s better to spend your mental energy on factors you can control – such as the mix of your investments. A diversified mix of investment options may better align your account with your tolerance for risk and may help smooth out the ups and downs of the market. Not all investment options go up and down at the same time.
For example, having some funds in fixed income investment options may help dampen the volatility from your equity investments. Your investment mix may need shifting occasionally to keep everything in balance with your long-term goals.
Get started with EFP i-Invest, you can manage your EPF account 1 savings quickly and conveniently online.
Call and speak to an investment professional for some perspective.
Make a phone call and talk to your financial consultant so that they can lend perspective to your plans. Your consultant can help you understand what’s happening and how it affects your long-term savings goals.
And if you don’t have a solid retirement strategy, they can get you started.
Whether you need to find a consultant or just touch base with your current one, put a date on your calendar right now for this conversation so you can better navigate today’s bumpy market conditions.