Things to do during a volatile market

Not long ago I attended a fun session about financial planning put on by Ameriprise Financial. While I didn't completely agree with the economic philosophy of our speaker, the session was fun and they gave me all sorts of fun tools to evaluate my financial plan. I thought I'd share a slightly revised version of the tips they gave us for your benefit. While most of these seem straight forward, they could also be mistaken for a page right out of Warren Buffet's investment priciples. I thought they were interesting and added my own explanations to make them clearer...

Things to do in a Volatile Market:

1. Don’t let emotions drive your actions

- Buy low, sell high and know that no matter what happens the market is still your best option for long-term investments.

2. Diversify, Diversify, Diversify…

- Look for low/ undervalued stocks, in other words those that have not done well but have preformed well historically. If you invest in stocks that are doing well, then the only direction to move is down.

3. Be Disciplined

- Continue putting money in every week/month. Don’t stop just because the market is down or up. If you're not comfortable with the market right now this same principle goes for your retirement acount and savings. Make good financial habits and stick to them.

4. Avoid Market Timing

- This related back to number 1and basically means don’t sell or buy when everyone else is. Kinds reminds me of my 3rd grade teacher..."You don't have to follow what everyone else does." Take example from Warren Buffet; buy when others sell and hang on to those stocks for the long haul.

5. Get (or Review) your financial plan.

- This is by far the most important thing! Have a plan and stick to it. If you don’t have a plan, find companies like Ameriprise financial that offer free counseling sessions and investment lessons. It’s a good idea to review your plan every year and re-evaluate your plan at least every three years.