High impact news in economy | How to protect your investments

josevas217 (79)modin Project HOPE • 3 months ago

Hello friends of Project Hope, I hope you are all having a great day. Tomorrow, Wednesday, April 10, the inflation data in the United States will be known, which are of utmost importance, since they will determine the path that the Federal Reserve will take from now on in relation to the interest rate between other monetary policies that they will have to assume.

Therefore, I consider that it is important to keep these things in mind when entering the financial markets, to avoid high exposure to the market and losing money due to the high volatility that generally occurs with that news, in all markets in the world,

Additionally, what comes out there can also give us a better perspective of what may happen from now on with market prices, that is, it can define a greater trend in the economy in general.

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To avoid large losses, I would like to leave you below a series of suggestions that you could consider if you want to remain involved in the financial markets to try to take advantage of this volatility:

Stay informed and anticipate: Being aware of economic and financial news is essential. Follow trusted sources and stay up to date on events that could impact the markets. Anticipating possible scenarios will help you make more informed decisions. On Twitter or X, there is a lot of breaking information that can help us stay up to date with the news.
Diversify your portfolio: Diversification is key to mitigating risks. Invest in different asset classes, such as stocks, bonds, real estate and commodities, in different geographic regions. This can help us reduce exposure to a specific event affecting a particular market. And nowadays we have no excuses for not being able to do it, since in this globalized and digitalized world, there are many tools that make the process easier for us.

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Maintain a long-term time horizon: I wrote about this recently, and it is something that gives peace of mind, because price fluctuations will affect us very little if we focus on the long term, even decades. Financial markets are volatile in the short term, but tend to stabilize and grow in the long term. Staying calm during periods of turbulence and not getting carried away by emotions can be crucial to avoid impulsive decisions that could harm your portfolio.
ALWAYS use risk management tools: Consider using tools such as stop losses or put options to protect your investments. These strategies can help you limit losses if the market moves against your positions.

These 4 suggestions can make your capital suffer less in case things do not go as you expect, and I could say that it would be best to stay out of the market if we are facing situations of economic turmoil. In particular, I will stay on the sidelines tomorrow, and wait for how the market reacts to see what to do. And what will you do?