If you’ve been watching your ETF investments lately, you might be feeling a pang of unease. Many of our students have reached out with the same concern:“My ETF is down, some are even in the negative. I’m worried about the uncertainties in the U.S. economy. What should I do?”
It’s a valid question, especially when headlines scream about volatility and market dips. But here’s the good news: you don’t have to panic. Markets fluctuate—it’s their nature. The key is to step back, reassess, and make decisions based on your goals, not fear. Let’s walk through some practical steps to navigate this moment.
1. Revisit Your Investment Time Horizon
First things first: remind yourself why you invested in the first place. What’s your time horizon? Are you in it for one year, five years, or a decade or more? Your strategy should align with that timeline. A short-term dip might feel alarming, but if your horizon is long—say, 10 years—temporary declines are just noise in the grand scheme of things. Historically, markets recover and grow over time. So, take a deep breath and ask:“Am I still on track for my original plan?”
2. Clarify Your Goals
Next, think about what you’re aiming for. Are you targeting a modest 2% annual return, or are you chasing something more ambitious, like 10% or higher? Your goal shapes how much risk you’re willing to stomach. If your ETF is down but still aligns with your long-term target, a temporary setback might not be a dealbreaker. Clarity here keeps you grounded.
3. Reassess Your ETF’s Track Record
Not all ETFs are created equal, so let’s double-check the one you’ve chosen. Pull up its performance over the past 3, 5, and 10 years. How did it hold up during past downturns, like the COVID crash or the 2008 financial crisis? If it’s weathered storms before and still delivered solid returns over time, that’s a vote of confidence. If nothing fundamental has changed about the product—and it still fits your criteria—hold steady. Patience often pays off.
4. Has Something Changed? Act Accordingly
Sometimes, it’s not the market that shifts—it’syou. Maybe your goals have evolved. For example, if you now need cash to buy an apartment, it might make sense to sell. But here’s the catch: only sell if you have a clear next step. Are you moving the money into a better opportunity, like real estate or a different investment you’re confident in? If your ETF is negative, consider whether the new option can recover those losses. Randomly cashing out without a plan rarely ends well.
5. Explore Your Options
If you’re still uneasy, here are a few proactive moves to consider:
- Diversify with Spare Cash: If the U.S. market’s volatility is keeping you up at night, look beyond it. Spread some money into other categories—European ETFs, gold, or even high-yield savings accounts. Diversification doesn’t eliminate risk, but it can smooth the ride.
- Tune Out the Noise: Media thrives on the “now”—breaking news, dire predictions, and clickbait headlines. But investing is a long game. Cut back on the constant updates; they rarely reflect past achievements or future potential.
- Educate Yourself: Want to feel more in control? Skip the news cycle and dive into books on long-term financial trends. Follow financial experts who focus on data, not drama. Knowledge is your best defense against uncertainty.
The Bottom Line
A declining ETF can feel personal, but it’s rarely the full story. Markets ebb and flow, and your job as an investor is to stay focused on yourwhy. If your time horizon, goals, and the product’s fundamentals still align, hold tight—the returns will likely come. If something’s shifted, adjust with intention, not impulse. And if you’re rattled by the ups and downs, diversify, step back from the headlines, and arm yourself with education.
That’s where Investling comes in. With our comprehensive online course for portfolio management, we address situations just like this. Together with AI mentors, you’ll always have someone by your side for advice—helping you navigate market dips with confidence and clarity. Investing isn’t about avoiding every dip—it’s about riding them out with a plan. You’ve got this, and we’re here to help.
