The year 2022 has presented challenges for investors , with stock markets experiencing significant volatility and bond markets showing unpredictable movement . Much of this can be attributed to external events . The most notable triggers are an extended period of record high inflation , Russia ’ s invasion of Ukraine , and a dramatic shift in monetary policy by the Federal Reserve as they begin to raise interest rates and end pandemic financial stimulus .

Times like these can cause anxiety for investors . As you watch markets move up and down , sometimes dramatically in a day , it ’ s natural to wonder whether it ’ s time to make changes to your investments . Before you do so , it ’ s important to think about your finances in the context of the broader picture and seek advice from a professional who can help you evaluate what actions , if any , you should take . Here are five tips to get started .

# 1 – Don ’ t let daily events overly influence your decision making

It is easy to become overwhelmed with the headlines of the day , particularly if seemingly bad news is piling up and having a negative impact on the markets . Keep in mind that we ’ ve seen many periods where markets suffered sharp downturns . Yet historically , markets as a whole have always recovered any ground lost during short-term setbacks . Headlines come and go , but building an effective , long-term strategy should remain your primary focus .

# 2 – Re-assess your risk tolerance

If you ’ re feeling uneasy about market volatility , you may need to take another look at the level of investment risk with which you are comfortable . Periods of market volatility are often a true test of the ability to withstand temporary setbacks to your portfolio . Another consideration is your time horizon . For example , if you are within five years of retirement , you may want to consider scaling back the level of risk in your portfolio to protect against the impact of a major downturn occurring at the wrong time – just when you need the money for retirement .

# 3 – Stay properly diversified

Once you ’ ve determined your risk tolerance , the next consideration is diversification . Maintain an appropriate balance of stocks , bonds , and other types of investments . In addition , make certain you don ’ t have a concentrated position . As a rule of thumb , no individual holding should represent more than 20 % of your asset mix . This includes company stock you may hold in your workplace retirement plan .

# 4 – Continue or expand systematic investments

While volatile markets can be concerning , they shouldn ’ t impact your ongoing investment plans . If you make regular contributions to your workplace savings plan or other accounts , it ’ s best to maintain those investments . If markets go down , your regular contribution will purchase more shares of the investment . That could benefit you over the long run . If you have the ability to save more through systematic investing , don ’ t be hesitant to boost those amounts you sock away regularly .

# 5 – Review your strategy with your financial advisor

It can be helpful to discuss your financial situation in the context of today ’ s markets with your financial professional . They will be able to help you assess your current position , if your portfolio carries an appropriate level of risk and whether there may be investment opportunities you should consider today . Having a conversation about the best way to approach today ’ s markets can make a difference and can help keep you on track to achieve your most important goals .

This Industry Insight was written by Jonathan D . Martin .

Jonathan D . Martin is a Financial Advisor with Ameriprise Financial Services , LLC in Bethel Park , PA . He specializes in financial planning and asset management strategies . Contact Jonathan ’ s office at 412.831.6240 extension 202 , located at 88 Fort Couch Road , Suite 210 , Pittsburgh , PA 15241 , or visit his website at www . ameripriseadvisors . com / jonathan . d . martin . Jonathan is licensed / registered to do business with U . S . residents only in the states of PA , DC , HI , TX , OH , WV , AZ , CA , FL , IL , IN , NC , NJ , SC and VA .

Investment advisory products and services are made available through Ameriprise Financial Services , LLC , a registered investment adviser .

Investment products are not insured by the FDIC , NCUA or any federal agency , are not deposits or obligations of , or guaranteed by any financial institution , and involve investment risks including possible loss of principal and fluctuation in value .

Meet your future with confidence .

Jonathan D . Martin Financial Advisor

412.831.6240 x202 88 Fort Couch Rd Pittsburgh , PA 15241 jonathan . d . martin @ ampf . com ameripriseadvisors . com / jonathan . d . martin

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