In a year of market volatility, investors are still struggling to grasp what is going on in the market and how to navigate it.
The markets have lost $15.7 trillion in value since the financial crisis.
That’s a whopping $10,000 per U.S. worker.
A lot of that has been lost in the last year as the U.N. Climate Summit ended in disaster and a wave of global trade deals went into effect.
The U.K. economy has lost another $3 trillion, and the euro zone economy is expected to shrink by 2 percent in the first quarter.
The global stock market has fallen almost as much as the Dow Jones Industrial Average.
It’s been a slow-motion decline.
But it’s only been a slowdown in the pace of loss.
“The market is going to go down as long as the stock markets continue to lose money,” said Bill O’Neil, a partner at law firm Mayer Brown.
“It’s a slow burn.”
Here are five simple steps to stay on top of what is happening in the stock price.
Buy stocks with your money.
The stock market is up more than 3 percent so far this year, the fastest pace since 2008.
It is up about 10 percent so-called cyclical gains.
That means a rise in profits, a rise or fall in prices and a rise and fall in the value of bonds.
It can also be a period of extreme price volatility.
The Dow Jones Composite Index is up 10 percent this year.
The S&P 500 is up 4 percent, and other indexes like the Nasdaq Composite are up 3 percent.
The big gains are usually due to speculation that the next rally will be big.
If investors buy stocks that are up, they are not paying a high price.
They are paying a lower price for the same stock.
In theory, the market is always rising.
The only time it has fallen is when it is in a bear market.
Investors who buy stocks with their money can buy those stocks at a lower cost.
But the market can be volatile.
So when the markets go up, it usually goes down faster.
That can mean you lose money.
So keep an eye on the market.
Buy bonds with your cash.
Bonds with fixed-rate terms are a great way to invest your money in a stock market.
When bonds go up in value, you can take them out and use the money to buy stocks.
This is called a dividend.
Bond holders are usually buying their bond at a higher interest rate than bond holders holding cash.
The bond price tends to rise and the value goes down.
If you buy bonds with cash, you are paying for the bond, not the stock.
That gives you a bigger cushion against losses in the markets.
A more volatile stock can be worth less than bonds, but you can still earn a profit if the stock falls.
Buy long-term bonds.
Long-term debt is another great way for bondholders to earn a dividend from the market, because long-Term Treasury bonds pay interest and dividends for 10 to 20 years.
When the market rises, bondholders can buy the bonds for more.
If the stock prices go down, they can take the bonds out and get the cash back.
The upside is if the bond price falls, you will earn more interest and the bond will be worth more.
Sell stocks with cash.
Cash is usually a safer way to buy shares because it tends to be cheaper than bonds.
But when the market goes up, cash is often worth less.
This can mean the price of the stock is more expensive than cash.
Sell bonds with long- term Treasury bonds.
The long- Term Treasury Bond Fund is an excellent way to save for your retirement.
It has an option to buy long-dated bonds at a discount, and it also pays dividends every year.
Sell your stocks.
There are also plenty of stock market ETFs, ETFs that track the stocks in different industries, like the SPDR S&P 500 ETF.
These ETFs tend to be more volatile than the market itself.
Investors can buy these ETFs to hedge against stock price volatility, and they can use the funds to buy stock.
If stocks go down too fast, you may lose money buying the ETFs.
But if stocks go up too fast and you make a profit, that will put you in a better position to buy the ETF.
Don’t be a bear.
There is a lot of hype and buzz about how stocks are going to rise.
But keep an open mind.
It will take time, but the market will eventually return to a more normal state.
“If we look at a lot more stock indexes than just the S&p 500, the stock index is going down more,” said O’Neill.
“So it may take a while to get back to normal.”