With the volatility of forex and the crash of crypto, the stock market would seem to be the best place to build wealth. However, with the government forced to take action over rocketing inflation and cost of living, huge interest rate hikes have led to what the Wall Street Journal have described as a market being ‘rocked’ by volatility. With so many unknowns on the horizon, it’s difficult to plan for the future. That being said, there are still ways to find value in the market – but they require a lot more careful planning and thought than before.

Conducting thorough research

Retail and institutional investors made huge gains over the past two years. This effect has been so pronounced that analysts including CNBC issued guidance on tackling huge capital gains taxes, such as the inflation of portfolios due to the undulation of the market. As a result, many investors, especially in retail, have played hard and fast with their strategies. It’s now time to reel in any reckless behavior and start investing in a controlled manner. One of the better ways to achieve this is through options newsletters. This includes Bloomberg Terminal, Jeff Clark Trader, TradeTheNews and the King Report. Essentially, for inexperienced investors, looking to the tried-and-tested strategies and picks will help to shore up the situation and bring new prosperity.

It’s also a good time to review what tools you use to conduct your research, and how effective they are. The Bloomberg Terminal and Benzinga are often seen as the key platforms for investment, and there is some sense in that, but there are lots of different ways to approach your research that can be equally as effective. For example, take MarketWatch and their roundup of research solutions; the move to a digital investment climate has led to the development of far more flexible tools than the old stable.

Avoid meme stocks

The so-called meme, or Reddit stocks, such as $AMC and $GME, were characterized by huge gains as retail investors piled in through 2020-21. However, according to one Yahoo Finance analysis of Goldman Sachs reports, the vast majority of retail purchases made from 2019-22 have now been sold off as the mania of the meme stock craze subsides. Accordingly, don’t be tempted to buy the dip of these stocks. They are exceedingly unlikely to return to the pre-2022 levels that made them so attractive, especially with retail investors feeling the pinch.

That’s not to say that you shouldn’t look for undervalued stocks. Penny Stocks remain one of the most important stock categories, according to Forbes; they enable investors to invest a small amount of capital while engaging in high-risk strategies, effectively acting as a trainer for the world of big investments. With small investment levels, it’s entirely possible to find penny stocks that turn into quick wins or add considerable value to your portfolio – just don’t rely on them entirely.

Wait it out

The reason the stock market gained so much value after the pandemic was due to the combination of stimulus checks, low interest, and an overall rise in blue ticket stocks, chiefly the tech giants. The situation now is much closer to ‘normal’ – it’s a reflection of the admittedly difficult economic situation that many Americans find themselves in, and it can’t be easily resolved. However, with economic growth continuing, and borrowing costs increased, there is an opportunity for the country to return back to a more stable state of affairs – and that’s good news for investors. Volatility is the killer of a long-term portfolio, and there is no way to plan for the future. These conditions will eventually expire, and when they do, it’s important that your portfolio is in the right place.

A good example of this doctrine can be seen in Warren Buffett’s work. As the Financial Times highlights, Buffett and Berkshire Hathaway have long relied on calm. They look for businesses with longevity and the strength to power through previous recessions, but who also have industry-spanning profiles that make them more than suitable for long-term recovery. Staying calm, and making picks during the volatile period that stick to those companies that have real pedigree, is crucial. You can’t lose your head.

Planning for the future

Perhaps an obvious step, but investors need to be absolutely, completely, aware of their finances. There are likely to be further cost of living rises; inflation will continue to rise, at least in the short term, and the bounce back from those interest improvements will take time, as well. That means that the time value of money – the theory that 5 dollars today will be worth more than 5 dollars in a month’s time – is a little bit more impacted than it is during good times.

Having a strict budget, and putting in projections for how inflation and other price fluctuations will impact you in the future, will ensure that you’re able to make the right investments without impacting your own quality of life and ability to invest in the future. Long-term planning is the name of the game, and with the markets as volatile as they are, your overall strategy in the money management world should be to hold tight.

Hold steady – make concerted, precise stock picks – and stay away from the crazes. It’s time to reign in your own volatility, and accept the dip of the stock market. As long as your picks are high quality, your portfolio will outlast the tumult. That said, the volatility in the market today will continue to change how every single dollar invested performs – and that’s something you have to be aware of. Careful management of your portfolio and a commitment to ensuring that your plays are sustainable will help you to emerge from the other side with more money in your stocks – rather than the complete crash that many other traders may well soon be on their way to experiencing.

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