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Yahoo
4 days ago
- Business
- Yahoo
4 Ways To Protect Your Investments When Fake News Creates Market Volatility
While the stock market is driven by earnings growth over the long run, on a daily basis, the twin emotions of fear and greed can override economic fundamentals. This has been brought into sharp focus in 2025, as the stock market has gyrated wildly in reaction to the Trump administration's ever-changing tariff policy. Read More: Find Out: Part of the problem has been that 'fake news' regarding the specifics of the tariffs has leaked into the financial press, creating market volatility as investors alternately panic and rejoice at the latest headlines. The resultant up-and-down moves in prices have been tough to handle, even for veteran investors. Here are some steps you can take to protect your investments — and your peace of mind — when fake news creates market volatility. Stocks are a long-term investment vehicle. In fact, if you don't plan on holding your stocks for at least five years, most advisers recommend you stay out of the stock market completely. This is because short-term fluctuations and longer-term bear markets could depress the value of your portfolio for months or even years, and selling out when the market is low is a losing strategy. To ride out these inevitable dips, it's essential to keep a long-term perspective. Over time, what seem like dramatic short-term moves end up being only barely noticeable blips on a long-term chart of the market. You can protect your investments by keeping that in mind, understanding that the ups and downs of the market eventually smooth themselves out. See Next: If other investors are going to make bad decisions based on emotion, there's no reason you can't take advantage of that. If fake news drives the market down 5% in a single day, it could be a great opportunity to pick up more shares of the quality stocks or ETFs in your portfolio. Even if the news turns out to be true, if you're a long-term investor, adding to your positions when they are 'on sale' can be a good way to boost your returns in time. Picking up additional shares when the market is low can be a prudent way to invest for the long run. But offloading positions you were thinking of selling anyway, when investors are falsely euphoric, can be another. While you shouldn't sell stocks just because the market is up on any given day, when fake news is creating upside volatility, it can be an opportunity. This is especially true if you're already considering selling a position, either to take a profit or to jettison an underperforming stock. This shouldn't be confused with day trading or timing the market — it's just a good way to sell stocks you wanted to unload anyway when the market hands you 'free money.' For some investors, the best option to protect their portfolios is to take a step back from the financial press. While total ignorance of what's going on in the market isn't advisable, neither is watching the financial news 24/7. At any given moment, the commentary on TV could make you feel like you're missing out on a big opportunity, or conversely, that the world is completely falling apart and you should sell everything. Being too close to the action makes it more likely that you will overtrade, making investment decisions based on emotion instead of good sense. This is one reason why most advisors recommend you only rebalance your portfolio every quarter, or even once per year. Simple as it sounds, for investors who are prone to have an emotional reaction to the stock market, the best option could be to just turn off the TV. In the era of social media, information is disseminated in the blink of an eye. In some cases, this can be beneficial. However, with the proliferation of fake news, it can also be a curse. Many traders, trying to get an edge on the markets, will instantly react to certain news headlines, even if they are unverified or just flat-out untrue. AI trading is exacerbating these swings, as computers can automatically make moves in thousandths of a second. As an individual investor, you have no control over these market movements. But you do have control over how you manage your portfolio. If you can avoid making emotional decisions, stick to your long-term investment plan, and selectively take advantage of big swings in the market, you'll end up with the best results. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on 4 Ways To Protect Your Investments When Fake News Creates Market Volatility
Yahoo
4 days ago
- Business
- Yahoo
4 Ways To Protect Your Investments When Fake News Creates Market Volatility
While the stock market is driven by earnings growth over the long run, on a daily basis, the twin emotions of fear and greed can override economic fundamentals. This has been brought into sharp focus in 2025, as the stock market has gyrated wildly in reaction to the Trump administration's ever-changing tariff policy. Read More: Find Out: Part of the problem has been that 'fake news' regarding the specifics of the tariffs has leaked into the financial press, creating market volatility as investors alternately panic and rejoice at the latest headlines. The resultant up-and-down moves in prices have been tough to handle, even for veteran investors. Here are some steps you can take to protect your investments — and your peace of mind — when fake news creates market volatility. Stocks are a long-term investment vehicle. In fact, if you don't plan on holding your stocks for at least five years, most advisers recommend you stay out of the stock market completely. This is because short-term fluctuations and longer-term bear markets could depress the value of your portfolio for months or even years, and selling out when the market is low is a losing strategy. To ride out these inevitable dips, it's essential to keep a long-term perspective. Over time, what seem like dramatic short-term moves end up being only barely noticeable blips on a long-term chart of the market. You can protect your investments by keeping that in mind, understanding that the ups and downs of the market eventually smooth themselves out. See Next: If other investors are going to make bad decisions based on emotion, there's no reason you can't take advantage of that. If fake news drives the market down 5% in a single day, it could be a great opportunity to pick up more shares of the quality stocks or ETFs in your portfolio. Even if the news turns out to be true, if you're a long-term investor, adding to your positions when they are 'on sale' can be a good way to boost your returns in time. Picking up additional shares when the market is low can be a prudent way to invest for the long run. But offloading positions you were thinking of selling anyway, when investors are falsely euphoric, can be another. While you shouldn't sell stocks just because the market is up on any given day, when fake news is creating upside volatility, it can be an opportunity. This is especially true if you're already considering selling a position, either to take a profit or to jettison an underperforming stock. This shouldn't be confused with day trading or timing the market — it's just a good way to sell stocks you wanted to unload anyway when the market hands you 'free money.' For some investors, the best option to protect their portfolios is to take a step back from the financial press. While total ignorance of what's going on in the market isn't advisable, neither is watching the financial news 24/7. At any given moment, the commentary on TV could make you feel like you're missing out on a big opportunity, or conversely, that the world is completely falling apart and you should sell everything. Being too close to the action makes it more likely that you will overtrade, making investment decisions based on emotion instead of good sense. This is one reason why most advisors recommend you only rebalance your portfolio every quarter, or even once per year. Simple as it sounds, for investors who are prone to have an emotional reaction to the stock market, the best option could be to just turn off the TV. In the era of social media, information is disseminated in the blink of an eye. In some cases, this can be beneficial. However, with the proliferation of fake news, it can also be a curse. Many traders, trying to get an edge on the markets, will instantly react to certain news headlines, even if they are unverified or just flat-out untrue. AI trading is exacerbating these swings, as computers can automatically make moves in thousandths of a second. As an individual investor, you have no control over these market movements. But you do have control over how you manage your portfolio. If you can avoid making emotional decisions, stick to your long-term investment plan, and selectively take advantage of big swings in the market, you'll end up with the best results. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 5 Types of Cars Retirees Should Stay Away From Buying The 10 Most Reliable SUVs of 2025 This article originally appeared on 4 Ways To Protect Your Investments When Fake News Creates Market Volatility Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
