Calm your stock market fears with these 3 movements | Personal finance
A good way to allay your stock market fears is to maintain a good mix of stocks. And you should also aim to invest outside of stocks.
I also like owning REITs (Real Estate Investment Trusts) listed on the stock exchange. Their stocks trade the same way as stocks, but their values don’t always rise and fall directly with fluctuations in the stock market. And because they’re required to distribute most of their profits to their shareholders, they can be solid income investments, even if they don’t always generate the most impressive share price growth. You may find that REITs fit well into your investment strategy as well.
3. Have money on hand for emergencies
The most effective strategy I have employed in my effort to become a calmer investor is to maintain a strong emergency fund.
I tend to keep about 12 months of living expenses in the bank. Most people can get away with less, but I have my reasons (such as being self-employed and therefore ineligible for unemployment benefits) for wanting a bigger cushion.
Having this money in the bank has, in the past, allowed me to leave my investments alone when I needed money during times when the stock market had plunged. Increasing your emergency cash reserves can also help you avoid selling stocks at inconvenient times.