5 Investment Tips To Navigate Volatile Markets

For over a decade we have seen volatility in a variety of investment vehicles driven more by emotion than metrics. This environment creates opportunities for investors, but it’s not for the faint of heart. Navigating volatile markets can be nerve wracking without a solid plan of action. Here are 5 investment tips for navigating volatile markets in any type of investment.

1. Establish a clear long term objective for your investments. An alarming number of investors cannot clearly articulate their investment goals. You need to know what outcome you are working towards in order to make the choices necessary to succeed in any market, but volatile markets require rapid analysis and decision making based on a clear strategy. You cannot develop a clear investment strategy without deciding what end result you desire. A news anchor reporting the recent market crash said, “what are you going to do with your stock market investments? I have no idea what to do, so I guess I’m just going to sit here and ride it out.” This passive approach is common among investors who do not have a clear goal in mind.

The first step to establishing clear, well articulated investment goals is visualizing the life you want to live. Choosing an arbitrary monetary result is rarely effective. Saying, “I want to create a net worth of over a million dollars” is much less effective than saying, “I want the freedom to wake up each morning and decide what I want to do with my day. I want to spend time with my family, share new experiences with close friends, contribute to my community, be healthy and happy as I learn new things, and explore new places.” The latter goal allows you to visualize the desired outcome of your investments. It helps you choose between a wide variety of investment options and breathes life into your goals making it easier to stay the course through difficult times.

The second step is to place a monetary cost on each component of your long term goal. Using our example above, we can quickly determine what kind of investments we need and what returns those investments need to generate. In our example, we want to get up every morning and have the freedom to choose the day’s activities. In order to accomplish this we need to invest in something that creates passive income (income that comes in no matter what we choose to do each day). To determine how much cash flow we need to accomplish this goal, we will add up our household expenses on an annual basis, including the cost of the experiences we want to share with friends/family and the charitable contributions we want to make each year. This gives us a number to work with, but the dollar amount is not the goal, it is the clearly articulated lifestyle we desire that will provide the powerful WHY to help us stay focused and make decisions that will achieve our desired result.

The third step is to write down this lifestyle vision and the resulting monetary goals in great detail. Keep it where you can see it and review it each day, or several times a day if necessary, to keep you focused as you make investment decisions. Some people even create a bulletin board with pictures of their desired lifestyle to motivate themselves.

2. Determine the investment vehicles that best suit your long term investment objectives. It is critical to match your investments to your individual long term goals. If you don’t, you are destined to be disappointed in the outcome. Spend the time necessary to explore your investment options and understand how they work, how they create value for you and what risks/rewards are involved in each option.
Continuing with our lifestyle example, a 401k invested in the stock market with limited investment options where the gains are reinvested and cannot be withdrawn without penalty creates no cash flow to pay for the life we are envisioning. Other investments however, like rental real estate, will generate ongoing cash flow that will allow us to build the life we desire and have articulated in detail.

3. Understand the risks/rewards of each investment option and compare them to your personal risk tolerance. Be honest with yourself about the level of risk you are willing to take. This is very personal and there is no wrong answer. Risking more than you are personally willing to lose destroys your lifestyle by creating unnecessary stress, anxiety, and financial strain. Be realistic and find investment options that are well matched to your risk tolerance and your life situation. 20 something singles can risk more of their income and savings than older investors caring for a young family. The downside risk of your investment strategy needs to match the stage of life in which you currently find yourself.

4. Educate yourself. Spend time and a reasonable amount of money to become well informed on all aspects of your chosen investment strategy. You cannot make educated, well-thought-out decisions without knowing the details. Volatile markets test your knowledge by compressing your decision timeframes. You may not have time to fully research your options while in the middle of a fast paced market. You need to prepare ahead of time.

5. Find a mentor who has successfully created a similar lifestyle using the investment strategy you have selected. It is much more effective to follow in the path of another’s success than to learn from your own failures or the failures of others. Yes, it is critical to learn from our mistakes and the mistakes of others we observe. It is more important, however, to participate in a community of like-minded people with similar goals and strategies. This provides a fertile environment to learn how to make decisions that bring you ever closer to the lifestyle you desire and have articulated in enough detail to motivate/sustain yourself through any market cycle.

As an investor you have no choice but to start from where you are with the resources currently at hand. Stay positive and hopeful. You CAN create an effective map from where you are today to the lifestyle that you created as you worked through these 5 tips for navigating volatile markets. If you need more help or want to find a community of like minded people, check us out at and be sure to listen to The Del Walmsley Radio Show by clicking on the radio tab to listen online or by finding a station in your area.


  1. I really like what you said about figuring out what you want to come out of your investments, before you invest. Like you said, you need to go into knowing what you want to come out of it in the long run. I’ll be sure to keep this in mind, my husband and I have been trying to figure out where we should invest.

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