Stock Market Volatility for the Everyday Investor

August 10, 2011

As you probably know, the stock market has been a bit volatile in the last couple of days.  And, there is good reason for investors to be wary, because speculation and uncertainty are driving these recent waves.  Why?  Well, where everyday investors really don’t have the resources to take advantage of volatility, hedge funds and investment banks are trying to game the market to make huge profits.  There certainly will be a story or two about great success (or great failure) in the current market.

What can the everyday investor do?

1.  Stay on top of your portfolio — press your broker for the fundamentals behind your investments and how the market volatility will effect those investments.  Make sure that any structural change in your portfolio has a good reason and will be sustainable in the long-term.

2.  Try not to game the market.  Speculating on the recent waves is a great way to lose a bunch of money.  If you are speculating, don’t put any more money in play than you are willing to lose.

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