How a stock market investor handles market volatility
It's easy to panic during uncertain economic times.
The stock market never performs in a truly predictable way.
When the market gets especially volatile, I always hear the voice in my head from "Star Wars" telling me to "stay on target." It's not that I'm thinking of veering off, as I want to blow up the Death Star (so to speak) as much as Luke Skywalker did.
It's very hard not to act when everything seems as if it's blowing up around you. In most cases, though, buying and selling just because the market has dropped ends up being a mistake.
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Certainly, volatile markets create buying opportunities, and if you have dry powder — available cash — they're a good time to make a move. Adding a new position or buying more shares of a favorite at a favorable price can help ease the pain of deep losses.
But like the young almost-Jedi looking to do the impossible, sometimes you need to just stay on target.
