How To Keep the 2022 Stock Market From Bankrupting Your Future

What a year it’s been so far for the stock market. Wild swings are keeping investors on edge, and some of the best-performing stocks of last year are down more than 40% so far this year.

Why? It’s a combination of things, including lower-than-expected earnings reports from major companies, inflation worries, and federal reserve interest rate hikes.

How can we keep the highly volatile stock market from driving us insane and bankrupting our future?

Did you know that an estimated 95% of day traders lose money? Don’t be one of these people. Instead, buying and holding a diversified set of stocks and bonds is how most working professionals build wealth over time. It might seem boring, but it works.

Invest, Don’t Day Trade.

It’s disheartening to watch our investment portfolio shrink. And, it seems like that’s all it’s been doing this year. But remember, true wealth is built over time, not overnight.

Think Long-Term.

Index funds make this process easy, and it means investors won’t lose their shirts even if the stocks of several companies that are inside the index fund tank. Investing in a wide variety of stocks more evenly distributes risk.

Diversification Is Key.

This strategy means we’re investing a set amount of money at a consistent interval (ie: monthly, biweekly, etc) regardless of the price of the stock.

Dollar-cost Averaging Is Better Than Timing the Market.

Resist the temptation to overextend yourself by investing too much money because if the market does drop, or a recession hits the economy, you might feel the burden of having too much money invested in a down market.

Only Invest Within Your Limits.

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