Dale Jackson

Personal Finance Columnist, Payback Time

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Ah, summer – a time for many to kick back and enjoy the carefree days.

But for investors, the markets never take a vacation – and not paying attention can be risky.

If you want to take a break from the turmoil and keep your nest-egg safe, here are four things to consider:

1. Volume is low: You’re not the only one on vacation. Traders around the world normally take time off over the summer, making overall trading volume thin. That means stocks – especially smaller stocks that normally trade on low volume – can be subjected to wild price swings. You can keep tabs on stocks through a mobile tracker.

2. Set stops: It’s more important than ever to set stops on your stocks in summer. A stop is a set price below a stock’s current trading price that will trigger a sell and limit losses. You can go one step further by setting a trailing stop, where a stop is set at a certain per cent below the current trading price. If the trailing stop is breached it will trigger a sell and also lock in gains. 

3. Keep in touch with your investment advisor: Investment advisors take vacations too, so it’s good to know who will be watching over their accounts while they are gone. Also, be sure to leave contacts with your IA in case they need to reach you – and check your messages.

4. Set it and forget it with DRIPs: Dividend reinvestment plans are a great way to automatically use dividend payouts to buy more stock. Many publically traded corporations offer DRIPs and will waive trading fees or provide new shares at a discount. DRIPs are also a great way to buy more shares at regular intervals and average off the cost over time.   

Dale Jackson is BNN's Personal Investor. Follow him on Twitter @DaleJacksonPI