With various factors currently affecting the investment landscape such as the ongoing pandemic, potential war, supply chain disruptions, the Great Resignation, inflation, and the looming possibility of a recession, many investors are feeling uncertain about how to proceed. For those who have enough surplus to invest, it can be challenging to navigate these uncontrollable challenges without risking their wealth further.

To help navigate these challenges, here are some general and specific suggestions that can be beneficial in the current investing climate. By considering these recommendations, investors may be able to better prepare themselves for the days ahead, regardless of their situation.

1. Start by Defining (or Redefining) Your Goals

Defining what “success” means is crucial for achieving financial success. Simply stating that you want to “make a lot of money” or be “wildly successful” is not enough. It is important to clarify exactly what that means and what needs to be accomplished to achieve it.

Without a clear definition of wealth, it can become all-consuming and difficult to maintain balance in life. This is especially important given the many challenges that investors face today. Setting a vague goal of “making money” without a specific definition of what that entails can lead to stress and uncertainty about whether you have done enough to achieve your goal.

To avoid vague goals, it’s important to establish clear-cut objectives. This means defining what financial success looks like for you. Financial expert Rachel Cruze suggests that a financial goal is simply “any plan you have for your money.” You don’t need to create complicated spreadsheets or budgets to establish financial goals. What you need to do is take the essential step of defining them.

Your financial goals should be both short-term and long-term. It’s possible to have well-defined short-term goals that help you achieve your long-term goals. Whether your goals include buying a particular stock, owning your first rental property, or reaching a net worth of $1 million, make sure they are specific and clear. By doing so, your financial goals can serve as your guiding light as you navigate the various challenges of investing in the present time.

2. Create Strategic Support Systems

You may have the ultimate say in how you allocate your funds, but that doesn’t mean you should go it alone. It’s a wise move to surround yourself with individuals who can provide guidance and support, and perhaps even help you alter your investment habits as necessary.

This group might include a skilled financial expert to manage your retirement accounts or a financial advisor to help with overall planning. However, it’s also vital to associate with people who can help you adopt the right mindset, behaviors, and emotional reasoning that will prepare you for success in any circumstance.

The importance of having the right people in your life is highlighted by lifestyle investor Justin Donald, who emphasizes the significance of spending time with individuals with the desired mindset for financial success. To ensure success in navigating investing challenges, it is crucial to have individuals in your life who can reinforce the right kind of thinking, behavior, and emotional reasoning.

Having someone to turn to when making critical financial decisions or to talk you down when feeling emotional or worried can be invaluable in protecting and building your wealth. So, it is essential to identify who to turn to when discussing investments and critical financial decisions.

3. Embrace Growth

Investing can become predictable with time, as there are many tried and tested investment strategies that can still yield sizeable returns in the modern economy. But relying solely on past strategies can lead to a narrow, one-dimensional approach to investing, particularly when navigating today’s investing challenges. It’s easy to feel overwhelmed by wealth-threatening circumstances and resort to familiar investment behavior. However, challenging times are often packed with unique, profitable opportunities, which can be identified by those who are willing to adjust their strategies, seek growth, and take action.

The concept of a “growth mindset” can play a pivotal role in this regard. A growth mindset revolves around believing that your talents aren’t fixed but can continue to develop and grow over time. Carol Dweck, a Professor of Psychology at Stanford University, coined the term. She emphasizes that it’s very difficult to have a mindset of growth, adding that “One reason why is we all have our own fixed-mindset triggers. When we face challenges, receive criticism, or fare poorly compared with others, we can easily fall into insecurity or defensiveness, a response that inhibits growth.”

While a growth mindset is often linked to things like career advancement and developing skillsets, it also applies to finances and investment. In a challenging or hostile environment, allowing triggers to lead to impulsive or habitual behaviors can come at a cost. Even if you follow past successful “fixed” strategies in an evolving investment landscape, it can lead to missed opportunities. Instead, it’s better to look for ways to develop and grow as an investor. Seek opportunities for improvement, evaluate how to take advantage of current opportunities and stay open-minded while navigating today’s investing challenges.

4. Spread Out Risk

To avoid increased risk during market struggles, it is important to diversify your investment vehicles instead of putting all your investments into a few options. Diversification means owning a variety of assets that perform differently over time, according to Due founder and CEO John Rampton. It is not enough to simply buy a few different stocks or properties.

A diversified portfolio should include investments spread across widely diverse channels to keep risk low during a volatile market. The end goal of diversification is to provide security and mitigate risk. If an investment fails or underperforms, you won’t lose everything. It is important to review your investment portfolio and ensure that it is diverse, including a solid foundation of steady investments such as bonds, mutual funds, and ETAs, as well as higher-risk options like individual stocks, real estate, and alternative investments.

5. Don’t Be an Emotional Investor

It’s important to avoid making emotional decisions when faced with investing challenges. The urge to act impulsively can be strong, but it’s important to resist the “go with your gut” mentality. Instead, take a step back and remain calm. Seek advice from your support system and refer to financial quotes to ground your thinking.

While it’s important to consider your initial emotional reaction, avoid acting too quickly. Take time to approach the situation with a calm and collected mindset. This may mean waiting to make a decision until you’re thinking clearly. While this could result in missing an opportunity or losing some value in the short term, avoiding potential catastrophes caused by impulsive decisions will pay off in the long run.

Creating a Better Mindset

Investors should avoid making emotional decisions during investment challenges. While it can be tempting to react impulsively, it’s important to stay calm and resist the “go with your gut” mentality. Instead, seek advice from your support system and use financial quotes to ground your thinking.

If you do go with your gut, avoid acting too quickly and wait until you’re thinking clearly before taking action. To stay focused and avoid distraction, set financial challenges for yourself that can boost self-confidence and help you prioritize. It’s important to reshape goals based on your needs and not what others tell you to do.

Despite the many potential threats facing the financial sector, investors can navigate today’s investing challenges by maintaining the right mindset and creating internal infrastructure to guide their investing activity. By doing so, they can avoid making mistakes and capitalize on opportunities as they arise.