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4 Things Investors Can Do in Volatile Markets

  • Volatile markets can cause impulsive decision-making about your portfolio.
  • There are things you can do to help hedge your portfolio in times of uncertainty.
  • The team at State Street Global Advisors SPDR is committed to helping you navigate market challenges when they occur.
Head of SPDR Americas Research

While the urge to act is natural, it’s almost never a good idea to make impulsive decisions about your portfolios.

There are, however, four things you can do when volatility strikes.

1. Trust in diversification.

When market uncertainty occurs, it’s time to get back to the basics. In other words, trust in portfolio diversification and rely on traditional risk mitigation tools (e.g., Treasurys, gold, liquid alternatives) to play the role they were designed to play in your portfolio.

2. Stay focused on the long term.

History has shown that time in the market—not timing the market—tends to lead to more successful outcomes over the long term. This is especially true during volatile periods that see large, outsized movements in either direction. Time is a great leveler, and swift and sizeable recoveries have historically followed steep declines.1

3. Ensure adequate liquidity.

Review the liquidity profile of your portfolio, as well as the liquidity of individual funds within it. Be sure you have sufficient liquidity should you need to trade, as the cost to do so could be high. Our SPDR Sales Execution and Implementation teams are here to help.

4. If you must trade, do it efficiently.

If you have to trade, don’t trade using market orders or within the first 30 or last 30 minutes of the trading day, when volatility tends to be highest and spreads at their widest.

In times of uncertainty, focus on what you can control. And know that we are committed to helping you navigate the market when challenges arise.

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