By Meghan Murray
As an investor, you can easily feel frustrated to see short-term drops in your investment statements. But while you cannot control the market, you may find it helpful to review the factors you can control.
Many forces affect the financial markets, including geopolitical events, corporate profits and interest rate movements – forces beyond the control of most individual investors.
In any case, it’s important to focus on the things you can control, such as these:
• Your ability to define your goals. One area in which you have total control is your ability to define your goals. Like most people, you probably have short-term goals—such as saving for a new car or a dream vacation—and long-term ones, such as a comfortable retirement. Once you identify your goals and estimate how much they will cost, you can create an investment strategy to help achieve them.
Over time, some of your personal circumstances will likely change, so you’ll want to review your time horizon and risk tolerance on a regular basis, adjusting your strategy when appropriate. And the same is true for your goals. They may evolve over time, requiring new responses from you in how you invest.
• Your response to market downturns. When the market drops and the value of your investments declines, you might be tempted to take immediate action in an effort to stop the losses. This is understandable. After all, your investment results can have a big impact on your future. However, acting hastily could work against you.