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5 Tips to Remember During a Volatile Market

Increasing market volatility may raise many questions and uncertainties. Are we heading into a recession? Is the market going to continue to decline? Should I take my money out? How will my dreams and goals be affected?

No matter what the current market brings, there are always opportunities in the financial markets. The key is to understand how to react and what your mindset should be when there is significant market uncertainty. Your financial advisor can help ensure you stay on track to reach your goals.

Here are five things to think about when the markets take a turn:

  1. Review your financial plan
    An optimal financial plan takes into consideration a lot more than asset allocation. Elements such as cash management, protection management and retirement planning are also key pieces to a holistic plan. Overlooking any of these elements can put your dreams and goals at risk. Now is the time to meet with your advisor to find out how market volatility is affecting your plan and to determine if you need to make adjustments.
  2. Don't let emotions affect your financial future
    Up and down market movement is a fact of life. Don't let your emotions drive your decisions. Stay focused on your long-term investment objectives to help ensure your plans stay on track.
  3. Diversify, diversify, diversify
    Diversified investing across stock, bond and cash investments can help smooth out the inherent ups and downs in the market. Your Ameriprise financial advisor can help you determine the appropriate investment mix depending on your goals, risk tolerance and time horizon.
  4. Be disciplined
    Disciplined investment strategies such as dollar-cost averaging can help smooth out market fluctuations. Dollar-cost averaging is the practice of investing fixed amounts in equities at set periods of time. Over time, your average price per share will usually be reduced, and may help put you in a better position to weather a volatile market.
  5. Avoid market timing
    It can be tempting to react to market volatility by trying to time the market. But effectively timing the market requires you to make two correct decisions that are very difficult to make: exactly when to buy and exactly when to sell. This is a risky game to play. Being out of the market at the wrong time — even if it's for a short period, can significantly cost you.

A financial professional can help determine if you need to make adjustments based on current market conditions.

Diversification helps your spread risk throughout your portfolio, so investments that do poorly may be balanced by others that do relatively better. Diversification and asset allocation do not guarantee overall portfolio profit and do not protect against loss.

Dollar Cost averaging does not assure a profit or protect against loss in declining markets. This type of plan involves continuous investment in securities, regardless of fluctuating process levels. Investors should consider their ability to continue purchases through periods of low price levels.

The views expressed in this report reflect the views of RiverSource Investments, LLC as of the date given. These views may change as market or other conditions change. Actual investments or investment decisions made by the firm and its affiliates, whether for its own account or on behalf of clients, will not necessarily reflect the views expressed in this report. This information is not intended to provide investment advice and does not account for individual investor circumstances. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon and risk tolerance.

You should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. To learn more about this and other important information about the funds,download a free prospectus. Read the prospectus carefully before investing.

Securities products are distributed by RiverSource Distributors, Inc., Member FINRA and managed by RiverSource Investments, LLC. These companies are part of Ameriprise Financial, Inc.