Here’s How to Protect Your Money in Whipsawing Markets
“All this market whipsawing is giving me motion sickness!”
This came from a friend of mine during a recent phone conversation. And I understand where he’s coming from.
The market hasn’t gone very far in one direction or the other. It’s just that for the past few weeks we’ve had some giant swings on a daily basis — both up and down.
This type of action can really be overwhelming if you’re watching every swing, and especially if you’re invested in some of the most action-packed stocks.
That’s why today, I want to give you my best tips for managing your money during these “whipsawing” times…
Don’t Hold the Handlebars Too Tight!
At the hedge fund, if you were paying too much attention to every swing in the market, you were said to be “holding the handlebars too tight.”
Think about riding a bike at a moderate speed. You can probably be pretty relaxed while making turns safely and comfortably.
But if you’re riding really fast… downhill… and the pavement is wet… you may find yourself gripping the handlebars too tightly. That’s because there’s all kinds of risk that you’re dealing with!
In this scenario, it’s best to put the brakes on, reduce your speed, and maybe find a safer route.
And the same thing goes with markets!
If you find yourself holding on too tightly, watching every day’s swing as if it’s a critical issue for your retirement, that probably means you’re being a little too aggressive with your capital.
If that’s true, it doesn’t mean you need to pull out of the market altogether, but it may be helpful to reduce the size of some of your positions.
That way, you can think with a clear and rational mind. Because decisions made out of fear or panic are often the WORST decisions you could make with your money.
To help you get started, here’s what I suggest…
Allocation Is Key — Keep Dry Powder
We don’t know which turn the trade war with China will take next…
We don’t know how the political drama in Hong Kong will truly impact our markets…
And we can’t tell for certain if the yield curve will continue its downward spiral.
But one thing is for certain — as long as these events keep making headlines, markets will continue whipsawing like they have for the last few weeks.
To best position your portfolio for the uncertain times ahead, I recommend that you loosen your grip on the handlebars and stay properly allocated.
Cash, stocks, bonds and gold is what I recommend.
Because these days it matters LESS about what you’re invested in and MORE about how you allocate your assets.
So today I’m checking in with you.
Is your portfolio properly allocated?
If not, make sure to balance your assets as soon as possible. And stick with The Daily Edge as we let you know the next moves you should make next to grow and protect your hard-earned wealth.