Donald Trump, market volatility and seven steps you can take to guard finances

Market volatility can happen at any time, sending shivers throughout the global economy and leaving investors fearful for their wealth. It can trigger emotional reactions that can lead to poor investment decisions. The recent trade tariffs fiasco shows just how suddenly this can happen and how far reaching the effects can be as world-wide markets go into free fall. Even experienced investors can panic as stock prices swing wildly. A spike in fears among investors fuels the volatility.

This so-called Liberation Day from Trump is set to go down in history with the subsequent aftermath volatility in markets at a level not seen since Covid hit. Trump's delay of the majority of tariffs for 90 days (and the possibility of a complete U-turn) has caused a bit of bounce back and could mean a boost to stock markets and diminish the fear of a serious growth slowdown or recession.

But the prospect for corporate profits is more uncertain than usual and the trade war with could be very damaging to the global economy. So despite some pick up in markets there is still a lot of uncertainty.

However, with the right strategy and a calm mindset, volatility can create unique opportunities for long-term growth.

History has shown that periods of extreme market volatility often smooth the way for a robust recovery. Instead of reacting emotionally, use volatility as an opportunity to refine your strategy, strengthen your portfolio, and reaffirm your financial goals.

Investing is not a quick fix, it is typically a long burn and volatility along the way is normal - it's part of the journey.

The key thing to remember is not to panic. The old adage of buy low and sell high is fundamental when investing.

SEVEN TIPS FOR INVESTING IN A VOLATILE MARKET

1. Strategy

Volatility tests your commitment to a long-term investment strategy. Remember not to rush into selling up or changing investments. If you've built a diversified portfolio aligned with your goals, remain calm and stay the course. Market timing can be tricky and rarely works.

2. Review

Regularly check in with your portfolio of investments to ensure they don't stray too far from your target allocation but avoid making frequent changes based on headlines. Use downturns to evaluate whether your risk tolerance still matches your investments.

3. Diversify

Diversification is your best defence against uncertainty. Stocks, bonds, , and commodities tend to react differently to market events, as do international markets. While some may dip, this could be counter-balanced by others doing well.

4. Spread

Instead of investing a lump sum in one go, spread your investments over time. This is known as pound cost averaging, or drip-feeding, where you invest a fixed amount of money at regular intervals. This will help to reduce the impact of short-term volatility and can help manage emotional decision-making.

5. Quality

In uncertain times, consider strong companies with solid balance sheets, steady cash flows, and a history of weathering downturns, which can often outperform riskier, speculative bets. Sound investments will adapt to changes, it can just take a bit of time.

6. Cash

Having a portion of your portfolio in cash or cash equivalents will allow you to take advantage of market dips. Buying quality assets at discounted prices can lead to strong longer-term returns.

7. Stop the chatter

Constant news updates and social media can amplify your fears. Make sure you limit your exposure to market chatter and focus on reliable financial sources and longer-term indicators.