6 Steps to Avoid the Financial Rollercoaster
The economy is always a volatile situation as it seems reaching financial consistency is almost impossible. Ever since September 11, 2001, the fluctuations in our economy have been even more pronounced. For many people it may seem that the financial freefall is always going in a downward direction. Fortunately there are steps you can take to protect yourself from the rollercoaster and take control of your own financial situation. Here are some ideas that may help you:
- Take stock of your financial condition. Organize all your stock certificates, social security information, bank statements, retirement account information and anything else that makes up your portfolio. This may sound like a no-brainer but if you’re not organized you’ll never have a true sense as to your actual financial situation. Once you’ve compiled a list of all your assets you’ll be in a position to move forward.
- Make an assessment. After you’ve organized all your assets and made a list of them, analyze each one individually. As you consider each investment decide the return they each provide now and in the may in the future. Rate each one as either low, medium or high.
- Know your risk capabilities. As you go through each investment figure out how much risk they inherently have. Again, rate their risk factor as low, medium or high.
- Achieve a balance. If your portfolio is leaning one way more than the other, then consider obtaining investments that can even out your portfolio. If you’re portfolio is full of high-risk investments then look into lower risk alternatives. With a volatile market, you want make sure you’re not leaning too heavily in just one direction.
- Avoid scams. Regardless of the financial situation there will always be people out there trying to get their hands on your money. A couple things to consider when you’re wary of an individual: banks don’t send people door-to-door to talk about their money, reputable firms don’t solicit people over the telephone about shifting their money and companies should always have references available for you to look at before entering into business with them.
- Find an advisor you can trust. Try to meet with your financial advisor at least two or three times a year. If you’ve developed a relationship with a financial guru you can trust then he or she will always have your best interests at heart. If you meet with him on a regular schedule he can keep you abreast of any new options that may bolster your portfolio that you’re probably not aware of.
Heather Johnson is a freelance finance and economics writer, as well as a regular contributor for CurrencyTrading.net, a site for currency trading and forex trading information. Heather welcomes comments and freelancing job inquiries at her email address firstname.lastname@example.org .