What should you do when the market seems to be in a temporary blip?
The financial market has its ups and downs, much like the journey we each take in life. Every day, we strive to be better than we were yesterday, and in the same way, we should view a temporary blip as a minor setback that has the power to propel us even further forward.
During these moments, it's essential to remain calm and approach our investment decisions with wisdom and care. With the right perspective, we can turn these brief downturns into opportunities to maximize our investment returns.
Don’t Panic
While emotions add color to our lives, they can become our worst enemy in investing. A temporary blip is just another day in the market’s journey. During these moments, it’s crucial to stay the course and avoid making hasty exits. Why?
- You'll realize your losses if you sell.
Exiting your investment when your investment value is decreasing can be very costly and you will realize your losses. It's highly advisable to withdraw your investment when your investment is profiting if you to decide to withdraw your profit.
- You'll miss the opportunity to invest at a lower price.
When the market drops, it opens up oppportunities to buy more shares or assets at a lower price. By not rushing to sell, you can take advantage of this opportunity to increase your investment and enjoy greater profits when the market recovers. Often, patient and calm investors end up with the biggest gains.
Focus on Long-Term Gains
Don't just focus on the temporary dip — zoom out and look at the long-term trend. For example, although the Wahed FTSE USA Shariah ETF (HLAL) recently experienced an 8% decline1, a broader view shows a 15% increase over the past year2. This reminds us to always keep our focus on the bigger picture.
1For the period from July 16 to August 7
2For the period from August 14, 2023, to August 13, 2024
Pursue Opportunities, Not Predictions
Time spent in the market is better than time spent trying to predict market movements. Stay consistent in your investments, as growth opportunities are always available for those who are patient.
Investing: Stay Calm and Keep Going
In investing, as in life, there will be good days and bad days. Don’t give up or let yourself be overwhelmed by market fluctuations. Stay calm, stick to your strategy, and remember that every journey requires patience and confidence to reach the desired destination. In the long run, your perseverance and patience will pay off.
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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
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