With market volatility on the minds of many individual investors these days, Fritz Fiebig of Zacks.com shares eight simple rules for investing during volatile periods: "If you find yourself tempted to make emotionally-based investment decisions due to the difficulty of the last few months, you are about to make a dangerous mistake. These have been some trying days and months with the amount of volatility in the market, and in order to come out ahead, you will need to instill some discipline in your investing process." With that in mind, here are five of the eight rules:
(1) Do the opposite of what your emotions are telling you;
(2) Separate your speculative assets from your conservative assets;
(3) Don’t take additional risks today to make up for losses you incurred in the past;
(4) Beware of the “hot new investment opportunity” bandwagon;
(5) If you are not comfortable taking a position, then don’t do it;
It will be interesting to see which "hot new investment opportunity" money management firms start to pitch to their clients over the next eight months. As Fritz warns in his article, this might be a single "bubble stock" or an entire asset class, such as commodities or currencies. In the mean time, let's all hope that we can find an "investment paradise" that shelters us from the volatility storm (see pic).
[image: Tornado in Senggigi Beach by Nature Explorer on Flickr]
