2022 What have I learned?

No matter how stormy 🇺🇸 market gets, never let it drag you down.

Continued inflation, the war in Ukraine, and the Federal Reserve's interest rate hike are the main causes of extreme volatility in global stock markets. As the dust settles in 2022, it's been an all-out rough year for investors. The stock market ended the year down an average of about 20%. this $Dow Jones Industrial Average(.DJI.US)$ Bullish is down 9%. this $S&P 500 Index(.SPX.US)$ The bearish is down about 20%.

I've had quite a few successes and failures in my stock portfolio. Here are a few things I've learned:

1. Diversify my portfolio:

Any company can hide serious issues from investors. Even the most financially sound and well-managed companies can be hit by uncontrollable disasters or major changes in the market, such as new competitors or changes in technology.

One strategy to protect myself from the company's downturn is to diversify my portfolio. Don't put all your cash into one stock.

2. When the stock price is temporarily low, buy stocks with stable fundamentals to reflect short-term investors' fears. First, do due diligence to find out why stock prices are falling. Make sure this isn't a serious issue. Do dollar cost averaging.

3. A truly diversified portfolio includes other asset classes such as bonds, metals, energy, money market funds, international stock mutual funds, or exchange traded funds (ETFs). Since the S&P 500 is dominated by large-cap stocks, diversification also means including small-cap index funds or ETFs.

4. Be a long-term investor. During the period of cyclical stock market declines, stick to investing in stocks with good fundamentals. These stocks will increase in value.

Most of us are now caring for loss. Yesr 2023 marks a huge shift in investor mentality. The old backup price/earnings estimates aren't enough to guide us now. We need to include prices/sales because it dominates the narrative explaining stock market volatility.

We learned a lot in 2022. Market fluctuations will continue. These drastically changing market dynamics will continue for some time. Hope 2023 is better for us.

PLEASE DYODD BEFORE MAKING ANY INVESTMENTS. Trade carefully in this volatile market. Good luck, 🍀

The above information is for reference only. This is not investment advice.

I'd like to invite you to share your additional suggestions in the comments box below so that all who read this postFriends can also learn additional tips for good investments.

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