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Smart investing strategies in any market

VIDEO2:0602:06
Smart investing strategies in any market

If the ups and downs of the stock market have you wondering what to do, you're not alone.

Stocks tanked in August, neared record highs in September and Goldman Sachs is predicting a wild ride in October.

On top of that, a recent UBS survey found that 55% of the ultra-rich see a recession by 2020 and 45% are already adjusting their portfolios to prepare — including shifting to bonds and real estate.

Financial behaviorist Jacquette Timmons said that uncertainty and the lack of control over the market's performance causes many people to fear investing.

"The other thing is trust," she said. "Can you trust yourself to do the right thing? Can you trust the professionals ... are doing the right thing?"

Warren Buffett says the secret to great investing is to wait.
Danielle Town
author and investor

Yet, it's important to remember that the stock market is going to go up and down several times over the course of your lifetime.

"I used to be super-afraid when I would hear ... scary news of the recession coming and the downs and then the ups" of the market, said investor Danielle Town, author of "Invested" and co-host of the podcast InvestEd.

"The way I handle it now with my investing practice is I pretty much ignore it," she added. "I find wonderful companies with great management with strong competitive advantages at, hopefully, a good price."

With that in mind, here are some smart investing strategies to help you through both the calm and volatile times.

Have rules and a system

Worried about the uncertainty and lack of control surrounding stocks?

Timmons said you need to confront your fears by figuring out what exactly you are afraid of. And then realize that there are ways to gain command of an investment strategy.

"What gives you 'certainty' and 'control' is having a system for investing, having some rules for investing," she said.

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Those rules could be around what kinds of stock you want to buy, how you evaluate its performance and the reasons you would want to sell — based upon company performance, not market performance, Timmons explained.

The system would be when you are actually evaluating those rules, whether it is quarterly, annually or some other time frame, she added.

Have a balanced portfolio

Make sure you have an "extremely robust portfolio," which means the ideal mix of stocks and bonds that works for you, said certified financial planner Stacy Francis, president and CEO of Francis Financial in New York.

An old investing rule of thumb is to have 60% of your portfolio in stocks and 40% in bonds. However, everyone needs to evaluate what is best for their specific situation, like the length of time until retirement.

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Francis believes the majority of people have too much stock in their portfolios right now thanks to the run up in the market. The Dow Jones Industrial Average has surged more than 46% since President Donald Trump was elected in November 2016.

"If you're watching your portfolio going up and down and finding that you're taking an obscene amount of Alka Seltzer and you can't feel comfortable sleeping at night, that is actually a very good wake up call that the portfolio you have — that mixture of stocks and bonds — may not be the right portfolio for you," Francis said.

Think long term and wait

Forget short-term trades, said Town.

She follows the investing practice of Berkshire Hathaway CEO Warren Buffett. That means buying stocks and then holding them for the long-term.

"Warren Buffett says the secret to great investing is to wait," she said. "What he means by that is: Wait for the right thing to come along, the right company at the right price."

Make investing a practice

Merlas | iStock | Getty Images

Town also likes to think of investing as a practice, similar to going to yoga or running a certain number of days a week.

"Think of it as being more about your own personal experience than about what's going on outside of us in the market because we don't control what's happening in the market," she said.

This way, she can sit back and discover what companies she is interested in buying.

Save 5% or 10% of your income

What you can control is how much you put aside for savings — including for emergencies and retirement, Francis pointed out.

Ideally, you should save 5% or 10% of your income each year, she said. To really outperform, put aside 15% if you can.

Invest in your values

When assessing what companies to buy, think about your values, said Town.

"Choose companies that are doing wonderful things in the world that you really want to support with your money," she said.

"Then invest in those companies at great prices," she added. "Companies that have a stronger purpose than simply making money tend to do better overall in the long term."

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CHECK OUT: 4 of the top money lessons a CPA learned from his CPA dad via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.