Volatility Is Rising. Here’s How to Protect Your Investment Portfolio.

Investors knew this year would be different. But lately, they’ve been getting a lesson in just how different it is shaping up to be.

Most analysts expected some action on interest rates from the U.S. Federal Reserve in 2022 — but maybe not the five rate hikes they’re now pricing in. Inflation was clearly driving upwards, but we’re seeing much higher, more consistent price increases. People have been moving their money away from growth-led tech companies and toward those in the value category, or stocks considered underpriced. And banks are now forecasting slower growth in the months ahead. All this is creating a wave of volatility not seen since the start of the pandemic era.

The Nasdaq Composite had its worst month in nearly two years in January, falling 9%. Massive intraday reversals made it difficult for retail traders — who have grown accustomed over the past two years to buying dips only to see them rise again — to time the market. Up until late January, confidence had been running high among the retail crowd, who’ve fueled speculative excesses across markets from cryptocurrencies to meme stocks. But both have been trending downward for months. And now, shifts in the situation in Ukraine are keeping volatility gauges well above 12-month averages.

“It’s a new investment regime, and the things that have done well the last couple of years probably aren’t going to do well in the next couple,” said Ben Laidler, global market strategist at the platform eToro. “Interest rates are going up, growth is slowing, returns are going to be lower, there’s going to be more volatility. That is the new reality.”

What does this mean for your portfolio? Investors who know how to take advantage of the changes in the market stand to profit from new opportunities. Those who don’t — or those who think they do but are mistaken — stand to lose out. To help guide you through these changing markets, Bloomberg News polled financial advisers and other experts for their best suggestions for retail investors. Here’s what they told us: