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Market Volatility

Market Fluctuations vs. Your Nest Egg

One day the market is up. The next day it´s down. You know that investing in the market is one of the ways to potentially increase your retirement income. But how do you enjoy the benefit of gains without the fear and risk of losing your entire savings?

  • Allocate and diversify
  • Stay the course
  • Invest regularly
  • Periodically re-evaluate your investment strategy

Allocate and Diversify

By allocating your money among asset classes such as equities, fixed income, cash equivalents, and even alternative investments, you create a balanced portfolio. This can help minimize the risk to you, should one asset class perform poorly. In other words, don´t put all your eggs in one basket.

Diversifying within each asset class can also help reduce risk. Choosing stocks from a variety of industries or market capitalizations and different kinds of bonds, real estate investments and even commodities can help you weather the storm in a volatile market.

Stay the Course

Investing can be emotional. Watching your hard-earned money ride the wave of the market can cause you to panic and make decisions that can have negative long-term effects on your retirement income.

A long-term investment strategy means building a plan and sticking to that plan. This removes emotions from the process and keeps you from making critical mistakes. Your representative can help you choose products that follow a long-term disciplined approach and that have good growth potential.

The chart below shows how investments that mirror an index and stay the course perform better than investments managed by individuals who may react hastily to market declines.

Invest Regularly

By setting aside a fixed portion of your income and making systematic investments into your portfolio, you´re exposed to less risk from market volatility.

It´s wise to invest on a regular schedule that is not dictated by current market performance. Using this investment strategy, more shares are bought when the price is lower and fewer shares are bought when the share price is higher. This can be preferable to making a lump-sum investment, which increases the risk of a sudden market decline depleting your portfolio. Spreading your investing out over time is a better way to manage risk.

Systematic investment programs do not assure a profit or protect against loss in a declining market. They involve continuous investing regardless of fluctuating price levels. You should consider your ability to continue investing through periods of fluctuating market conditions.

Periodically Re-evaluate Your Investment Strategy

Some of your investments may perform better than others. This can mean that your holdings in that particular industry or market sector will now be a greater percentage of your portfolio than originally allocated. To stay true to your investment strategy, it´s important to reallocate your money with the percentages you planned for originally.

Keep in mind that as you near retirement, your portfolio will have less time to recover from market declines.

Jackson® Can Help You Manage Market Volatility

Jackson has diversified, disciplined portfolios and several options to help you ride out a volatile market. Talk to your representative about how Jackson products can work for you.


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