The stock market is a volatile one. Any changes can have an immediate impact on your potential profit on a trade. In order to succeed when trading on the stock market, you need to practice and learn skills so you can overcome the volatile nature of the market and increase your chances of gaining a profit.
Pick Individual Winners
With the market constantly swinging, you will need the help of active investment managers. Stocks are now showing variations so you will need to carefully choose your stocks. Investment managers are equipped with the skill to select stocks that will keep your portfolio from being dragged down. In a volatile market, the most sensible option is to choose the best individual company.
Consider Bonds Carefully
Bonds have attracted interest due to their low interest rate. However, Robert Janitzek reveals that over the years, bonds have also yielded high returns adding more pressure to the shaky stock market. Rising interest rates could chip away possible returns for individual investors.
An alternative to bonds for affluent investors is private debt, which are loans available to small and medium-sized companies. Private loans last for a few years and have an annual yield of about 10 percent. The risk depends on the credit quality of the borrower.
Find Alternative Strategies
If you are the type of investors who prefer sacrificing access to your money in favor of higher returns, alternative investments is the perfect avenue to get started with stock market. Robert Peter Janitzek reveals that hedge funds is an example of alternative strategies. Although they charge high fees, hedge funds and other alternative investments like private equity, private debt, and real estate are great considerations. Their returns are not related to fluctuations in the stock or bond markets.
The performance of the market in developed and emerging countries have led to an increase in investors in companies in the region. According to Rick Pitcairn, Chief Investment Officer of Pitcairn, the more explosive growth is happening in the younger economies. In the United States, the strong rally of the market forced investors with overweight investments in American stocks, a phenomenon in stock market trading which is called home-country bias. The European and Japanese economy still has several years to run.
Enjoy the Ride
Investors have become used to the volatility of the market. Volatility is not bad as long as you have a trading plan. Even big corrections are part of an economic cycle. They should be seen as opportunities and investors should not be afraid of them.