It can be tricky to manage money properly for yourself or a business that you run. Let these steps guide you.

Staff Writer

There’s a J.K. Rowling quote I like: “It is our choices, that show what we truly are, far more than our abilities.” It seems fitting in today’s global landscape.

We’re living in unstable global geopolitical and socioeconomic conditions. The Global Financial Stability Report (GFSR) finds that even though financial stability continues to improve, economic activity has gained momentum, and long-term interest rates have risen–all helping capital market stability. However, the aftershocks of the different major socio-economic and geopolitical events continue to affect the world financial markets.

The ongoing political machinations around Brexit (the exit of the U.K. from the European Union) is a typical example of one of the destabilizing factors that continue to contribute to the global financial market volatility. To the casual observer, it might seem that as soon as the world gets through one crisis, the next one starts–adding levels of tension and insecurity to all our lives.

There have been terrorist attacks in Europe. The world’s markets continue to be baffled by Donald Trump’s outbursts on Twitter, while the U.S. markets have reacted positively to his business stance. Nothing is certain anymore.

Consequently, as entrepreneurs, we need to develop strategies and methodologies to steer our way through the ongoing market volatility. Here are five tips to help you develop sound financial strategies to face an uncertain future:

1. Don’t make hasty decisions.

I asked Anthony Di Maggio, senior trading analyst at Weiss Finance, about this. He got caught up in a pyramid scheme that made him a ton of money–which was all lost in a moment of time. People that knew and trusted him lost all their money, and his lifelong trust as well.

Di Maggio reminds us of the importance of not making hasty decisions. He notes that “it is important not to get caught up in the moment and not to fall for any typical get-rich-quick schemes that offer instant success without hard work and minimal risk.”

2. Control the uncontrollable.

This statement “control the uncontrollable” seems like a dichotomy in contradictions. How do we control what we can’t control? Well, it means we need to limit our business or financial exposure to risk.

For example, if we invest in the global financial markets, it’s wise to invest smaller amounts and to use short-term trading strategies. When we plan a business expansion or the acquisition of another company, it’s vital not to risk large sums of money over a longer period. In essence, the market volatility makes it very difficult to predict what will happen in the medium- to long-term.

3. Avoid making emotional decisions.

It is easy to make business decisions based on emotions when the business climate and market conditions are in turmoil. It is never a good time to make choices based on feelings.

However, if there is any time to avoid making rash decisions, it is during periods of extreme market volatility. Every choice needs to be thought out thoroughly before acting on the decision.

4. Diversify your investments.

The fact of the matter is that the greater the risk, the greater the reward–and the higher the risk of losing your entire investment. It’s important to reduce our risk by investing in a larger number of assets or businesses.

For example, as an entrepreneur and an investor, it’s important not to sink large amounts of money into a single company or stock. It is better to diversify our portfolios by spreading our total investment over a greater number of smaller investments.

5. Be careful when bargain-hunting.

The fact of the matter is that global financial markets will always have it’s up and down times (bull or bear markets). However, short-term volatility is not the same as the natural bull and bear market swings.

It’s also a good idea to look for assets whose prices are currently trading lower than usual, but whose business outlook is good; ergo, value for money. However, if a share price is up because of short-term volatility, and not a bull market, it might not be a good idea to invest in the asset.

Final words

There is no doubt that it is harder to make solid business and investment decisions during tough economic conditions. However, with careful thought and planning, it’s possible to not only survive these times but to thrive as an entrepreneur.