Preparing portfolios for volatility: Advice for any generation
With the "Magnificent Seven" losing $950 billion in market cap last week, according to data from Dow Jones, many on Wall Street are nervously awaiting earnings to turn things around. However, with so much uncertainty, it can be difficult to find the best strategies to navigate a volatile market. Providence Financial & Insurance Services President Anthony Saccaro joins Wealth! to break down the best ways to manage an investment portfolio during times of market volatility. For younger investors, Saccaro offers this advice: "If we're focusing on the younger generation, the phase of life or the playbook is going to be dollar-cost averaging. Dollar-cost averaging is when you're buying the same dollar amount of whatever investment is over and over of time, the math shows that it drives the average purchase price down. That's what happens and that's what you want to do is buy low. So if the market drops and you're buying shares periodically, that's good for you. That doesn't hurt. We don't like to see our portfolios go down from an emotional standpoint. But from a mathematical standpoint, that drop helps you." For older generations, Saccaro States: "Interest and dividends, because you can spend your interest and dividends, your portfolio is going to fluctuate but, if you're living on interest and dividends, then the fluctuation doesn't mean anything. It's like collecting rent on a house. As long as that rent payment is on time, the fact is, it doesn't matter what the value of the house is at any point in time." For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Nicholas Jacobino
