Investing in a Volatile Market

When investing, you need to be aware of market risk, which is the potential for investments to lose value due to market fluctuation or volatility. Market risk is always there. You can’t avoid it.

History shows that investment markets have grown over time, despite short-term ups and downs. Actually, these fluctuations are important. They create buying opportunities that may lead to profit over time. So, rather than trying to avoid market swings altogether, recognize that they happen and have a plan for when they occur.

Learn more about how to survive market volatility (PDF).

Finding the balance

You may think the answer to avoiding the worry of market risk is to choose less risky investment options. But options that appear to be less risky also tend to offer lower returns – returns that may not keep pace with risks, such as inflation.

You may find that going for higher returns also has you dealing with a lot more market volatility and risk than you are comfortable with. Besides, the market doesn’t always follow the risk vs. reward rule.

Investing is all about striking a balance between market risk and return. That’s your risk tolerance. Consider splitting your investments across many asset classes. The Plan offers a broad mix of investment types that may help balance your risk and return. Review the profiles and prospectuses to learn more about your investment options. The use of diversification and asset allocation as part of an overall investment strategy does not assure a profit or protect against loss in a declining market.

Many mutual fund companies pay reimbursements to the Plan for administrative functions they would normally perform themselves. Learn more about mutual fund reimbursements.

Get the help you need

Investing for retirement is all about balancing your risk tolerance with your time horizon, how long you have to invest before you need your money. Learn about your risk tolerance and time horizon by answering eight simple questions in  My Investment Planner.

Keep these tips in mind:

  • Don’t panic
  • Look to history for perspective
  • Stay focused on your long-term plan
  • And, talk with your Account Executive for more information
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