How to ride out the current market storm

Man in a black coat looks at newspaper stand displaying "Global market rout" headline. Blurred urban street scene in the background.

Mayhem. Meltdown. Bloodbath. These are just some of the words used to describe the falls in global stock markets we've seen over the last two days.

As an investor, it’s crucially important at times like these to stay calm and rational. In most cases, the best course of action is inaction.

In his latest article for rockwealth, ROBIN POWELL suggests nine positives investors ought to focus on. He also gives some practical tips on resisting the urge to act.

Unless you’ve just returned from a silent retreat, you’ll know that global stock markets are experiencing an unusual degree of turbulence. Markets fell sharply in the United States on Thursday after President Trump’s announcement of new tariffs on US imports, and it’s a similar story around the world.

As I write this, we’re in the eye of the storm, with commentators warning that the sell-off is far from over.

It’s a natural reaction to feel uneasy when markets fall sharply. Our brains react as if we're facing a physical threat. The amygdala, the brain’s fear centre, activates the fight-or-flight response, triggering the release of cortisol and adrenaline.

This can cause anxiety, increased heart rate, and impulsive decision making. At the same time, the pre-frontal cortex, responsible for rational thinking, may be overridden by emotions, leading to panic-driven decisions we may well come to regret.

The evidence shows us that, from an investment perspective, the best thing to do in these situations is usually nothing at all. Generally our long-term interests are best served by ignoring the noise and resisting the temptation to act.

READ THE FULL ARTICLE HERE

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