Stock market volatility is a hot topic as we approach the U.S. presidential election. Many experts predict that the uncertainty surrounding the election could result in increased market fluctuations, sparking anxiety among investors. According to a survey by the American Psychiatric Association, 73% of people reported feeling anxious about the election. This anxiety can lead investors to make impulsive decisions, potentially derailing their long-term financial plans.
As Brad Klontz, a financial psychologist and member of the CNBC Global Financial Wellness Advisory Board, explains, “When we become emotionally charged, we become rationally challenged.” During times of uncertainty, such as election periods, we are more susceptible to making poor financial choices.
To help investors cope with election-related jitters and protect their portfolios, experts offer the following advice:
### Picture your goal
If the upcoming election is causing financial stress, take a moment to reflect on your long-term goals. Setting a clear vision for what you’re working towards, whether it’s paying off your mortgage or saving for a major purchase, can help you stay focused. Consider placing reminders of your goals in visible locations to keep them top of mind.
### Ask yourself: Is your worry fact, or fiction?
Analyze your fears to determine their validity. While it’s easy to get caught up in worst-case scenarios, the reality is that the outcome of the election is uncertain. Political promises often fail to materialize, and the market tends to stabilize once the election results are known, regardless of the outcome. Separating fact from fiction can help you alleviate unnecessary stress.
### Revisit your goals and investments
Use your worries as motivation to review your financial goals and assess your investment portfolio. Consider consulting with a tax and financial professional to ensure your investments align with your objectives. Reevaluating your financial strategy can help you adapt to changing circumstances and minimize risk.
### ‘Spread out the stressors’
Instead of letting worries overwhelm you, break them down into manageable components. Identify the aspects of your financial life that are within your control and develop a plan of action to address them. By focusing on actionable steps, you can channel your anxiety into productive efforts to protect your financial well-being.
In conclusion, it’s essential for investors to maintain a clear perspective and stay focused on their long-term goals, especially during times of heightened uncertainty like an election cycle. By following these expert tips, you can navigate market volatility with confidence and safeguard your financial future. Stay informed and empowered with the Extreme Investor Network for more valuable insights and strategies to secure your financial success.