The stock market is known to go up and down. But investors are supposed to stay calm during market volatility and focus on long-term goals.

However, it can be difficult to lazily observe volatility in the markets and the portfolio without thinking about the long-term effect on your asset’s portfolio.

You shouldn’t worry about the ups and downs in the stock market. It’s how you react to the price movement that matters.

It’s easy to say “stay calm,” but it’s much more difficult to do. Here are four steps you can take to stay calm during market volatility. (See also: The 5 Proven Principles To Successful Investing).

1. Journal when you buy

Keeping a journal slows down your thinking. It will help you stay calm no matter what happens. This helps your brain break out of the fight-flight-freeze response that causes you to act on instinct rather than engaging the slower, calmer, more analytical part of your brain. When making long-term investment decisions, this is the part of your psyche you want to trust.

 That is why it is so important to keep an investment diary. Every time you buy a stock, you must:

1. Describe your reasons for buying the shares in simple terms for an eight-year-old to understand. Forcing yourself to make it so basic may seem trivial, but it will force you to refine your thinking to the core of what matters.

2. Imagine what should happen (scenarios such as bankruptcy, regulatory problems, falling earnings, changes in leadership, or dividend cuts) to make you consider selling stocks.

2. Turn volatility into opportunity

It’s never good to see the value of your investment portfolio decrease, but this type of volatility can actually be a good thing for many investors. Let’s say you go to Banana Republic’s and see a blazer you love that costs $150. Next week, you’ll see the same blazer for sale for $100. Great, time to pull the trigger, right? Yes. But instead, you decide to wait until the price rises to $200. This doesn’t make sense, but millions of investors do something similar. When the market is in crisis, they feel great and can’t wait to spend more money. When the bear market hits, they get scared and want to wait until things look better.

Understand that volatility is natural, and treating it as an opportunity by adding capital to your portfolio in times of downward pressure is likely to pay off in the long run. Better yet, if you contribute consistently, you can resist market volatility by buying fewer stocks when the market is high and more stocks when it is low. This strategy helps take the emotions and guesswork out of the investment equation.

3. Consider Your Portfolio’s Asset Allocation

The combination of stocks, bonds, and liquidity in your investment portfolio is something to research and discuss with your financial advisor as part of your long-term strategy. Conventional wisdom suggests that the closer you get to retirement, the more conservative your portfolio should be.

Here are some factors to consider carefully to obtain the correct combination:

• Target retirement age
• How close you are to the retirement age.
• Your need for ready money (i.e. liquidity)
• Your risk tolerance.

When using strategic asset allocation, investors often take these factors into account, which sets targets for asset classes and regularly rebalances portfolios with original allocations.

4. Let the markets be volatile. But focus on stability

It may sound weird, but the truth is that market volatility can be a good thing.

When the news talks about volatility, it’s usually only when the market is going down. But healthy markets do have some volatility. They go up and down. And volatility is part of what enables stock markets to deliver returns over time. One of the secrets to being a prepared investor is to focus on a long-term plan, like your retirement goals, so you can live the life you want when you retire. And this could take up to 30 (or more) years in the future.

Consider basing your investment options and changes on a set of long-term stable investment goals and your final retirement date, not the daily news of short-term market changes. Keeping an eye on your destination can help you manage potholes along the way.

In conclusion

Stop looking at the market price and start monitoring the performance of your investment using non-market based metrics. To do this, you need to keep an eye on your asset using easy-to-follow software like StockMarketEye. With StockMarketEye, you can track portfolios, keep watchlists, view charts including technical indicators, and free, flexible stock quotes.