The cyclical impact of the stock market makes it hard for new investors to gauge what is going on with their investments. You’ve probably heard that it is best to hang onto the investments you have during the dips. However, it can be hard not to panic when you see the account value starting to drop. There are several things you can do to protect yourself in these cases.
One of the most important things you can do is to compare your investment portfolio to what is going on in the market. You should notice if your investments are following the same trend as the market. If your portfolio balance is plummeting at a much faster rate than the market, you might need to take a deeper look into what’s going on. If your investment banker is telling you that you don’t need to worry and that your portfolio value is staying up despite the dipping market, you can still do your own investigating.
Another thing to watch for is a stock market correction. These can result in a sharp drop in the value, but it won’t have much of a difference in your investment unless you are a short-term trader. If your accounts are for your retirement, you are likely not going to notice the correction once you are ready to cash in the investments.
The investment adviser you use should be able to provide you with information about what’s going on with your portfolio. This is a relationship based on trust, but it is still a good idea to check up on what you’re being told. If you find misinformation that’s costing you money, you might opt to take action against the adviser. Unethical behavior shouldn’t ever be tolerated.
