Roller coaster stock market

As any Wall Street analyst will tell you, the stock market utterly hates surprises and uncertainty. And when it's startled by what's around the corner, it can respond by taking investors on a wild ride filled with heart-stopping, near-vertical drops and hairpin turns.

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As votes rolled in for Donald Trump, panicky investors fled to the relatively greener pastures of fixed-income investments. The market was expecting Hillary Clinton to win the presidential race, particularly after the FBI chief indicated there were no bombshells in the latest round of emails. Stocks rallied on that news; now, the election of Donald Trump is being greeted by Wall Street's version of a panic attack.

As a long-term investor, you'll have to hold on tight through breathtaking market ups and downs worthy of the most intimidating roller coasters. Bankrate talked to financial experts about how to ride out the volatility, and now we're passing their advice on to you.

Find a financial adviser today. View all Hide all. Craft written investment policy statement iStock. For those times when the market serves up twists and turns, testing your courage and turning your stomach, ensure you're grounded by an investment policy statement. This document serves as a blueprint or compass to remind you of your overall investment goals and why the asset allocation you selected is appropriate for your goals.

Duong, president and founder of Wealth Engineers in Denver. If you're a do-it-yourself investor, take the time to actually write out your investment policy statement. If you work with a financial planner, it's something the planner should do for you or provide you assistance in doing.

Don't have a written financial plan? Developing one can help you through what feels like a story plunge. And it reminds you that you are unlikely to be fully derailed from your plan simply due to some market volatility. More than likely, he adds, stock market investing during times of volatility will take you lower than you plan to be on occasion. Too much attention to business news can only boost the feeling you've boarded a thrill ride.

5 Roller Coaster Stocks | Seeking Alpha

That strategy hurt a client working with Carol Berger, CFP professional at Berger Wealth Management in Peachtree City, Georgia. She has a very hands-off approach. As the Greek debt crisis hit, the hubby instructed Berger to sell everything. Over the next few weeks, she says, "Nothing happened, and in fact the market rose a bit.

He called me a month later and said he needed to get back in the market. This wasn't the first time this happened. Not long ago, Berger reviewed the "his-and-hers portfolios" over a recent three-year span. Hers was up 30 percent, his 2 percent. One way to avoid leaping out from under your lap restraint is to remind yourself that if gyrations force you out of the stock market, you must be correct on when to get out, and correct again on when to get back in. Getting that timing right is very difficult.

Compounding the problem is that many investors return to the market only after it has rallied substantially. They ignore the fact that the biggest gains are often registered early in market turnarounds.

If past volatility has rattled your bones like only an old-fashioned wooden coaster can, a portfolio of exchange-traded funds can be a strategic tool to reduce overall volatility while attaining good long-term outcomes, says Jim Heitman, founder of Compass Financial Planning in Alta Loma, California.

If it appears a market correction is due, consider hedging by using an inverse ETF, says Phillip R. Christenson, financial planner and portfolio manager at Phillip James Financial in Plymouth, Minnesota. There's an antidote more effective than Dramamine for market-induced motion sickness, some experts say.

That is dollar-cost averaging, the practice of investing a fixed amount of money at regular intervals. Take heart in times of volatility that you are dollar-cost averaging into your k , adds Robert Wesley Shannon, owner of SJK Financial Planning in Hurst, Texas.

What's more, annual rebalancing of portfolios keeps investors from chasing returns and offers a systematic buying of low- and selling of high-priced equities. Search today for a financial adviser in your area. Ups and downs induce fewer white knuckles if you follow a strategy of matching a security to a specific cash need during a specific time frame, says Michelle Buonincontri, a financial planner in Anthem, Arizona.

This applies especially to retirees who are taking distributions from their retirement accounts. If your cash needs are secured and not dependent on the market during a rolling period of say, 10 years, risk is reduced because retirement withdrawals are planned events.

They don't require stocks be sold at market lows. And if that period were long enough, you most likely rode out the market decline without having to do any unplanned selling. Visualize yourself losing percent of your portfolio. It might seem scary. But knowing that no bear market has lasted forever should soften the impact.

There may be setbacks from time to time, but the stock market has always gone up no matter how much bad news tries to knock it down. Bankrate wants to hear from you and encourages thoughtful and constructive comments.

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My father joined the Navy at In Italy, he met his bride and my mother, and returned to the U. In , he bought a trust certificate If the Fed were seen as aggressive with rates, it could lead to a faster market slowdown, too. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website.

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But in the long term, coaster cars return to their starting points, while stocks only go higher. Bankrate's community sharing policy Bankrate's community sharing policy Bankrate wants to hear from you and encourages thoughtful and constructive comments. Product Rate Change Last week 6 Month CD 0. CDs and Investment Can heirs cash an old trust? Blog Investors should not fear a Fed rate hike If the Fed were seen as aggressive with rates, it could lead to a faster market slowdown, too.

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