| Let's be honest, the wild ups and downs of the stock market may have you chomping at the bit to make some changes to protect your portfolio. After all, we're only human, and sometimes our emotions can get the best of us.
However, the money experts interviewed by the CNBC personal finance reporters have this message: "Stay calm and carry on."
To be sure, the Russia-Ukraine conflict has been a source of major market pressure, spurring back-to-back losing weeks on the major averages. So, fear may be a factor for investors watching those developments.
The questions become: What is an investor to think about all this and what action should they take?
While this kind of market action can be nerve-wracking for investors, especially those near or in retirement, financial advisors urge investors to stay the course through the volatility.
All investors should accept market volatility — which is relatively common — as a normal part of the process of investing and the best way to outrun inflation, certified financial planner Brad Lineberger tells CNBC's Carmen Reinicke.
Investors should "embrace the volatility, because it's why investors are getting paid to own stocks," explains Lineberger, who is president of Seaside Wealth Management.
CFP Zach Abrams, of Capital Advisors, agrees. He tells Reinicke that investors should stay calm even through extreme movements. While stocks always move up and down, long-term market returns are still based on the same things: dividend yields, earnings growth and change in valuation.
It's normal for people to feel panicked during heightened market volatility, financial psychologist Dr. Brad Klontz tells CNBC's Michelle Fox.
It's the way the human brain is programmed, with our emotional brains bigger and more powerful than our rational brains, explains Klontz, a CFP and professor of practice in financial psychology and behavioral finance at Creighton University Heider College of Business.
"Go ahead and panic," Klontz said. "[But] don't panic about the fact that you are panicking."
In other words, acknowledge your emotions — but don't act on them. That goes for whether you want to sell during a big drop, or buy in during a surge.
It may be easier said than done, but the message from these experts is clear: never let emotions drive your investing decisions.
For more cool stuff like this, be sure to visit CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. |
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