The fight or flight instinct has helped our ancestors survive, but when it comes to investing, it’s often a losing strategy. When volatility strikes, panicked selling to avoid further losses could result in selling investments for less than you purchased them for. What’s worse, you run the risk of missing out on a rebound that may be right around the corner. ​

Missing these rebounds, or top-performing days, could harm long-term performance. When you look at an investment of $10K in stocks over a 20-year period, an investor who stayed invested would have made 58% more than one who missed just 5 top-performing days.

If the ups and downs of your investment returns are making you queasy, review the allocation between stocks and bonds. Bonds can help counter balance the peaks and troughs of stock prices. Learn more about portfolio construction with our portfolio builder.​

Inflation deteriorates purchasing power, increasing the likelihood of your investments falling short. While inflation may be outside of your control, there are investments that can help manage the impact of inflation and help keep you on track.​

Seek out inflation-linked investments​

Treasury Inflation-Protected Securities (TIPS) are U.S. government bonds with a face value that rises and falls with inflation, protecting investors from the risk of higher-than-expected inflation. Access a whole basket of TIPS in just one trade with iShares 0-5 Year TIPS Bond ETF (STIP).

Focus on real assets​

Physical assets like real estate and commodities can help protect investors from rising inflation and diversify portfolios. The costs for food, energy, and housing account for a large part of the Consumer Price Index (CPI).¹ Investing in the assets driving inflation can help your returns keep pace with it. ​

• Equity Real estate investment trusts (REITs) are companies that own or manage large properties which would otherwise be inaccessible to most individuals. Get access to a diversified portfolio of REITs with iShares Core U.S. REIT ETF (USRT).​
• Access energy, agriculture, livestock, and other sectors through just one ETF with iShares GSCI Commodity Dynamic Roll Strategy ETF (COMT). 

Limit cash drag​

When inflation is high, excess cash sitting in your bank account isn't doing you any favors. Short term bonds can help access growth while keeping without committing to a long-term investment. ​

• The iShares Short Treasury Bond ETF (SHV) can help put your cash to work while limiting the impact changes in interest rates.

Recessions can trigger a significant decline in stocks and a barrage of negative news stories that make it easy to lose perspective. Thankfully, the average recession only lasts around a year and investors who wait it out may be handsomely rewarded for their patience.¹  Since 1926, the average performance of U.S. stocks in the year following a recession was nearly 25%. Investors who cannot wait for a bounce back, could consider three strategies to help find resilience against economic headwinds.​

Focus on quality ​

Stocks: Companies with stable earnings, relatively low debt, and strong cash flows are associated with a characteristic referred to as “quality” and can all act as a buffer against losses in shrinking economies. Gain access to a basket of companies with these characteristics with the iShares MSCI USA Quality Factor ETF (QUAL).​

• Bonds: Investment grade bonds are loans by high quality issuers which have been deemed by independent ratings agencies to be less likely to miss an interest payment or be unable to repay the initial loan. Seek to track the entire U.S. investment grade bond market with the iShares Core U.S. Aggregate Bond ETF (AGG).​

Retreat to lower risk securities​

If the recession risk is too high to handle, consider moving into lower risk securities like U.S. Treasuries, where interest payments and initial loan values are guaranteed by the United States government. The iShares 7-10 Year Treasury Bond ETF (IEF) provides exposure to a U.S. Treasury bonds with remaining maturities between 7-10 years.²