Navigating Market Volatility: Strategies To Safeguard Your Investments

In an attempt to combat global inflation, the US Federal Reserve has indicated that interest rates will remain at a decade-long high for possibly years to come, quashing the hopes of analysts hoping for a reduction by the end of this year. Similarly, the Bank of England is taking a similar approach, with rates as high as 4.5%, something that has yet to be seen since 2007. These decisions can have multiple effects, one being increased mortgage payments and potentially destabilizing the housing market, and reducing the flow of investment into new enterprises.

In terms of traditional banking, these decisions have caused disruption to balance sheets, sometimes with devastating results seen with the collapse of Silicon Valley Bank, Silvergate, and Signature Bank being closed by regulators as a result of illiquidity. The resulting uncertainty, and the aftermath of spiking inflation and energy prices, can raise questions about the stability of institutional finance overall, and how individuals can secure their investments over the coming year.

However, in the last decade, there has been a broad democratization of banking and investment tools that have allowed individuals to have more control over their finances. While requiring knowledge of different financial mechanisms, many platforms are acknowledging this and producing material to assist and educate investors on how to navigate different instruments and strategies.

While retail investment platforms have gained media attention for users’ bold and risky approaches, the classic advice of ensuring a broad and diverse set of investments to absorb market shocks remains a reliable approach for retail investors looking to weather uncertainty.

Diversification

By focusing on diversification, StockLift founders Shannan and Brendan Sweeney have developed a proprietary algorithm to allow investors to see their portfolio's Diversification Score as a single number broken down by sector. Built as a user-friendly platform, their app provides users with tools to connect and analyze their investments, including net worth projections out to thirty years to allow for long-term planning. Further, their stock market simulator enables investors to try out an investment strategy before committing to it.

Additionally, the social aspect of investing has been a focus for StockLift, allowing users to publish articles on strategies and predictions within the community in sector specific pages. These allow investors to strive to beat overall trends, giving users accessible insights into market behaviour. For users seeking more detailed investment insights, their platform also allows access to certified financial advisors, displaying transparent fee structures and portfolio requirements to find the most suitable expert.

Leveraging Expertise

Most investors interact with trading and investment platforms through apps or browser-based portals. Making the team managing these platforms vital in supporting investors and traders. Bitget , for example, in addition to providing conventional investment tools and derivative trading specializing in digital currencies, has prioritized recruiting and cultivating high-quality talent. By building their experienced team, they are able to manage risk while overseeing their gradual but steady expansion, especially into the emerging markets of Latin America and Africa.

For investors looking to leverage the experience of an established global platform, they developed AI tools and copy-trading to improve trading experience. This allows new or more risk-averse investors to automatically follow experienced traders’ strategies while being protected by Bitget’s 1:1 reserve ratio of customer funds. Its latest product — Martingale AI strategy — intends to provide crypto newcomers with a convenient and advanced investment strategy enabled by AI. Additionally, Bitget applies robust asset protection practices, storing most data offline in multi-signature wallets to prevent hacking and holding a $300 million protection fund to support against threats.

Making Sense of The Haze

While these tools are useful for investors looking to keep a closer handle on their portfolios, the markets may not behave as predictably as in the past. The increase in interest rates is expected to slow down investment as lower-risk options, like government bonds, yield a more attractive return.

The result can be liquidity leaving various markets and a period of unexpected contraction, requiring careful analysis across multiple spectrums in order to develop the correct strategy to respond, and perverse an investor's long-term goals. This can sometimes mean increasing diversity and spreading risk across a wider spread of the economy, and sometimes internationally if the investor has the right experience and analysis at their disposal.

Having the Right Tools For The Job

While high-interest rates, and the resulting adjustments of markets, are causing some challenges for medium-to-long-term planning, platforms built over multiple years have emerged to support the needs of individual investors. Transparency, security, and support are major focuses for allowing peace of mind as the need for portfolio growth responds to inflation eroding underperforming investments.

Assessing the best approach for financial stability can be a hurdle for new investors looking to enter the market, platforms have responded with tools to allow for varying levels of risk, engagement, and autonomy. Additionally, platforms are providing education and support from experts to allow investors to gain knowledge of markets, strategies, and analysis to allow them to expand their knowledge and confidence in investment and trading.

By Jaime Catmull, Contributor