Major recessions and the both the stock and bond markets have experienced big drops in value

Full Answer Section

• I have started investing in individual stocks, but I only invest in companies that I understand and that I believe have a long-term future.
• I am not afraid to take on some risk, but I am also not going to gamble with my money. I am investing for the long term and I am confident that my investments will grow over time.

I have also changed my approach to my 401(k) account. I am now contributing more to my 401(k) and I am investing in a more diversified portfolio. I am also taking advantage of the employer match, which is free money.

I believe that the turmoil in the stock market is a good opportunity for long-term investors. Prices are down, but the underlying businesses are still strong. This is a good time to buy quality stocks at a discount.

I am confident that the stock market will recover over time and that my investments will grow. I am not going to panic and sell my investments. I am going to stay the course and I am going to ride out the storm.

Here are some additional tips for investing during a volatile market:

• Don't panic. It's easy to get caught up in the emotions of the market and make rash decisions. Don't sell your investments just because the market is down.
• Stay diversified. Don't put all your eggs in one basket. Invest in a diversified portfolio of stocks, bonds, and index funds.
• Invest for the long term. Don't focus on the short-term fluctuations of the market. Focus on the long-term growth of your investments.
• Rebalance your portfolio regularly. As your investments grow, you may need to rebalance your portfolio to maintain your desired asset allocation.
• Don't try to time the market. It's impossible to predict when the market will bottom out. Don't try to time the market. Just keep investing regularly.
• Get professional help if needed. If you're not comfortable investing on your own, you may want to consider getting professional help from a financial advisor.

Sample Answer

The turmoil in the stock market has definitely affected my outlook on investing. I am now more cautious and I have a longer-term perspective. I am also more diversified in my investments and I am not afraid to take on some risk.

Here are some of the specific changes I have made to my investing strategy:

• I have increased my emergency fund to 6 months of living expenses. This will give me a cushion in case I lose my job or experience another financial setback.
• I have invested in a diversified portfolio of stocks, bonds, and index funds. This will help to reduce my risk if one asset class performs poorly.