The overall market sentiment has been bearish lately, with many stocks down as much as 20%-70%. Although it's been a tough time lately for investors in U.S. stocks, it's important to keep in mind that volatility is an inevitable part of investing—and that a long-term investment strategy can provide a degree of insulation against the perils of emotion, impulse, and even potential regret in future years.

You may be asking yourself: What is market volatility anyway? One way to describe market volatility is the intensity and frequency of an asset's or market's price movements. The wider the trading ranges and price swings are, the more volatile the market environment is. Volatility gets a bad rap, as the term is often associated with sharp, accelerated downward price movements in a market. But sharp price increases equate to volatility, too.

Currently, major U.S. stock indexes are battling a higher interest rate environment, soaring inflation, war, supply chain issues, and more. All of this has culminated in accelerated downward price movements. 

Here's how investors can mitigate the impact of this volatility:

• Being prepared - focus on diversification and creating a balanced portfolio, both of which can help minimize the short-term impacts of downside market volatility. A balanced portfolio may consist of securities such as: growth stocks, dividend-paying stocks, defensive stocks, (like utility companies and consumer staple stocks), bonds, cash, commodities and precious metals.
• Identifying opportunities - As unsettling as downward price volatility on assets can be, it can create opportunities for select long-term investors with certain risk tolerances and time horizons. Dollar-cost averaging is another strategy that many investors employ during times of discounted asset prices—adding to holdings, that have long-term growth potential, as prices move lower.
• Staying the course - Ultimately, it's important to keep in mind that, in most cases, long-term investing can trump short-term market trading over time. Although, if you don't have a long-term investing horizon, then you should re-evaluate your risk tolerance and make the necessary adjustments within your portfolio, which may include reducing your exposure to market risk. 

If you are uncertain on what steps you should take with your investment portfolio, reach out to a seasoned investment advisor and make a well-thought-out plan.

Market volatility can be unsettling, but it's critical to remain mindful of the long-range game while keeping in mind that volatility is an inevitable component of market cycles and long-term investing. Patience and discipline are key in times like these.