A good way to ease your stock market fears is to maintain a nice mix of stocks. And you should aim to invest outside of stocks, too.
I also like owning publicly traded REITs (real estate investment trusts). Their shares trade in the same way that stocks do, but their values don’t always rise and fall directly with stock market fluctuations. And because they are required to distribute most of their profits to their shareholders, they can be solid income investments, even if they don’t always deliver the most impressive share price growth. You may find that REITs fit well within your investment strategy too.
3. Have cash on hand for emergencies
The most effective strategy I’ve employed in my efforts to become a calmer investor is maintaining a solid emergency fund.
I tend to keep about 12 months’ worth of living expenses in the bank. Most people can get away with less, but I have my reasons (such as being self-employed and therefore ineligible for unemployment benefits) for wanting a bigger cushion.
Having that cash in the bank has, in the past, allowed me to leave my investments alone when I’ve needed money during times when the stock market had taken a dip. Boosting your emergency cash reserves might help you avoid selling shares at inopportune moments too.
