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Why volatility is good for investors
What is volatility?
When you first start investing, the ups and downs of the market or volatility may seem worrying; but it can actually be a good thing. By embracing volatility, you can take advantage of buying opportunities. And with the right approach, like regular investing, it could work in your favour.
Why should I embrace volatility?
- Buying opportunities - When markets dip, it could be a good time to buy quality investments at lower prices. Buying during downturns could put you in a stronger position if prices rise again.
- Market recovery - History shows that markets tend to recover and grow over time. Staying invested for the longer term can help ride out the highs and lows. This approach could help with longer-term gains.
- Learning and growth - Experiencing market volatility helps you understand how different factors affect the market. Over time, this can help build and sharpen your investment strategy.
- Rebalancing opportunities - Market changes provide opportunities to rebalance your portfolio. Regularly reviewing and adjusting helps you stay aligned with your goals and risk tolerance.
The power of regular investing
Regular investing, often called pound-cost averaging, is one way to help smooth out the bumps in the market. Instead of trying to time your investments, you simply invest a set amount at regular intervals, such as every month or every quarter.
You buy more when prices are low and fewer when they’re high, but it evens out over time.
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Important legal information
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