Market fluctuations.. What are they? How is it dealt with?‎

Volatility is an investment term that describes the state of a market or a security when it goes through periods of unpredictability, sometimes with sharp price movements. People often associate volatility with falling prices, but volatility can also refer to a sudden rise in prices.

Political and economic reasons:

Increased market volatility is usually caused by economic or political factors, including changes in various markets, rising interest rates, and the Federal Reserve’s monetary policy, as the case may be. Political instability and other global events, such as a pandemic or war, can cause market volatility. Likewise, sudden economic news that contradicts investors’ expectations, a sudden change in monetary policy,

According to the “Wealthy” service, which is supported by the British global insurance company “Aviva”, volatility is usually referred to in a negative tone, but it can be a positive thing for both stock markets and investors.

Volatility is everywhere: According to Wealthy, volatility may be present in all financial market instruments, including bonds, stocks, commodities (such as oil and gold) and real estate prices. Volatility comes with all types of investments and the greater the volatility that comes with an investment, the higher the returns an investor is likely to get. Another term for volatility in the investment industry is risk. There is a common saying that says “no risk, no reward.” The same applies to volatility. Low volatility of an investment usually means lower potential returns. This is why cash in a bank account has minimal volatility compared to other types of investment that carry the lowest level of returns. On the other hand, stocks come with much higher volatility compared to cash, but investors expect higher returns.

Strategies to deal with market fluctuations:

Analysts suggest several ways to deal with market volatility, including:

* Invest in all circumstances, according to the advice of experts

* The right timing of the market: trying to get out of the market at the right time and return at the right time, although it is difficult to determine it.

* Maintaining a diversified investment portfolio

* Consult the financial expert you deal with: Do not take quick steps based on emotion or act based on a single event without consulting a specialist.

Develop a financial plan, and review it, if any

* Reassess your risk tolerance