Bullybear

From the minute the financial markets open each day, you can hear how the Dow Jones Industrial Average is doing. And by the time the final bell rings, the media are ready to explain not only whether the market was up or down, but why. Is it any wonder our heads are spinning?

Fortunately, there are a number of steps you can take to help manage your portfolio through all market cycles. Whether the markets are soaring, plummeting, or holding steady, there are portfolio strategies that can be helpful.

Diversify! One of the easiest ways to diversify your assets is with mutual funds. That's because your money is pooled with the money of other investors, then invested across a range of securities. This form of diversification can lessen the risk associated with the poor performance of a particular security or industry group.

What is your time horizon? If you're investing for the long term, you can feel comfortable sitting tight while the bulls and bears fight it out. That's because you will have the time to ride out market fluctuations and, historically, the stock market has provided the best returns over the long term. From 1926 to 1996, large company stocks posted a 10.7% compound annual return. This compares to a 5.10% return from long term government bonds and 3.7% from Treasury bills.

However, if you have more immediate needs for your assets, such as a college tuition bill or retirement around the corner, an adjustment to your portfolio may be necessary.

When it comes to investing, it's vital not to overreact to daily events or short-term market fluctuations. Based on the stock market corrections in 1987 and 1989, it appears most individual investors have learned to ride out market fluctuations. According to the Investment Company Institute, a very small portion of mutual fund shareholders redeemed their stock fund assets after the stock market's fall in 1987, and even fewer in1989. If you become tempted to sell as the market drops, remember the importance of maintaining a long-term perspective.

Buy low and sell high. It sounds so easy, but investment paralysis can set in at the first sign of a market correction. To avoid that temptation, advisors recommend automatic investing programs that let you invest a certain amount of money each month or quarter.

This approach can't protect you from a loss in declining markets or guarantee a profit. And you should consider your ability to continue investing during periods of low price levels. But over time, regular investing can help to lower the average cost of your investment purchases, and it can help to keep you focused on your longer-term goals in the face of market volatility.

When all is said and done, there are few, if any, guarantees when it comes to investing. But proper diversification, periodic adjustments to your portfolio and a long-term approach can go a long way to helping you achieve your financial goals.

ENB Associates Inc. is a wholly owned subsidiary of Evans National Bank. Securities are offered by O'Keefe Shaw & Co., Inc. Member NASD, and SIPC. Products purchased through O'Keefe Shaw may lose value, are not deposits with obligations of, or guaranteed by Evans National Bank or affiliates and are not insured by the FDIC.