Clark Howard's Tips

Diversify your investments to minimize risk in a volatile stock market

August 14, 2007

The stock market has been very unstable the past several weeks with huge gains one day and huge losses the next. The volatility has caused a lot of fear in investors.

There was a recent study that found people who pay too much attention to the market make poor investment decisions. That's probably because the financial press and outlets like CNBC tend to hype stock news and get people worried.

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But if you're still years away from retirement, just diversify your investments to spread out the risk and don't worry about every little bump in the market. After all, even investors who rode out the Great Depression eventually got some nice returns.

Clark doesn't plan to adjust his investing strategy just because of stock market volatility. He thinks CDs and 401(k) options are relatively safe choices.

If, on the other hand, you need your money in the next few months or years, you have to make investments that are very safe. Clark's Investing Guide provides info on some great options.

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