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Navigating Market Volatility with Bumped

Fluctuations in the stock market have the potential of drastically shifting both the monetary values of shareholdings and our emotional responses to them. While “market volatility,” or the unpredictability of the stock market, can feel challenging for investors, your shares through Bumped may actually help establish stability for your financial plans in the long-run.

The key is to find your sense of calm and stay informed with an objective perspective throughout the ride: we’re here to help with that.

Key Takeaways


What’s causing volatility?

Predictions of an oncoming economic downturn have investors scrambling with their money. Many people buying or selling at the same time is what causes the markets to significantly rise and dip. Global issues can add an additional dimension of insecurity, scaring investors into urgent decisions with their holdings.

Taking a historical view offers tried-and-true advice: don’t panic. While it may feel like the end of the world now, believe it or not, the stock market has done this before. With patience and keeping a steady hand on the wheel, you could see rewards of your hard work down the road.


Market trends over time

A general rule of thumb with the stock market is that it’s not necessarily about the timing at which you enter the market — it’s the total time spent invested in the market. It’s less about how much or when you invest– the key is that you simply do invest.

Strategizing with your holdings purely based on market timing can be both nerve-racking for you and potentially damaging for your portfolio. It’s like swerving lanes when you’re in a traffic jam: you may burn more gas just to feel further stressed, and possibly not much farther ahead than those cars you passed– not to mention the dangers inherent in reckless maneuvering.

Instead, try setting your sights on a long term horizon. Channel your perseverance, recognizing that every step is a part of the journey. By sticking with your holdings over the long-haul, you’ll be potentially more likely to arrive at your goal destination with rewards in tow.

Ibbotson chart showing historical stock market trends

Hypothetical value of $1 invested in 1926 through 2016. This is for illustrative purposes only and not a guarantee of future results

Supporting your brands in a down market

In a "down market", or when the prices of many stocks decrease, you can get larger pieces of ownership for less. For example, if Company ABC is trading at $10 per share before a market downturn, getting $1 of fractional shares in this company is equal to .1 shares. However, say the share price of Company ABC in a down market drops to $5 per share. Buying a $1 fractional share is now .2 shares of Company ABC. In other words, when stock prices drop, you have the opportunity to get larger pieces of ownership.

If the market starts to go back up and stocks increase in value, you now own a larger piece of the company. As a result, loyalty supporting your favorite brands throughout market bumps can go further for you and your portfolio

If the market shifts again by increasing its overall value and you keep your shares, you’ll end up owning a more valuable piece of the stock. As a result, loyally supporting your brands throughout the market bumps can potentially go further for you and your portfolio.

By supporting our economy via shopping with the brands you love, even in the midst of a downturn, you simultaneously can continue building your portfolio with stock rewards. Where you spend matters, and by spending with the companies you care most about, you can help co-create the economy you want to participate in. After all, every purchase is a vote for the success of your favorite brands.

The Power of Cost Averaging

“Cost averaging” is an investment strategy that intends to reduce the impact of market volatility. In the typical investment world, dollar cost averaging looks like investing the same amount of money into the same stock or fund at regular intervals, regardless of fluctuations. If the share price has increased, this amount of money will buy fewer shares per dollar. If the share value is down, the money invested will get more shares.

Over time with these tactics, one may develop a robust holding in their favor even with small amounts of money. This strategy can further help reduce the average cost per share overall by balancing out the highs and lows, in contrast to the potential risk of attempting to time the market.

With Bumped, consumers are consistently investing in their portfolios everytime they shop with their favorite brands and receive stock rewards. This means that even when the market’s overall value veers up and down, their total number of fractional shares in these companies continues to increase. Through regularly spending with their favorite brands through Bumped, users are already performing the “cost averaging” investment strategy.


Know Your Risk Tolerance

There are many factors that can influence an investor. It’s important to understand your own personal risk tolerance, as well as the factors that can contribute to that tolerance in volatile times.

  • Risk Tolerance

    “Risk tolerance” is the degree of variability an investor is willing to withstand with their investment returns. Like a personality type quiz, every individual may have a different risk tolerance. Some are more conservative with their holdings, others have a capacity for an amount of risk, while other investors may even have an appetite for risk.

    What matters is that you recognize when you feel uneasy, overly stressed, or are focusing excessively on the market: those moments indicate the extent of your risk tolerance. Generally, try not to push yourself beyond what you feel comfortable with. The extent of risk tolerance people can typically handle is often a by-product of life circumstances. That considered, whatever degree of risk feels best for you is uniquely fitting and appropriate for your needs, resources and preferences.

  • Confirmation Bias

    While practicing self-awareness to know your risk tolerance, it’s also helpful to take another step back and understand what fuels your perception of the market. “Confirmation bias” is a common tendency to give more weight to trends that we already believe in. This looks like favoring new evidence because it feels like a confirmation of already-held beliefs. Are there article headlines or market recommendations that resonate with you more strongly than others? Reflect how they might be affecting your sense of objectivity when navigating the market.

  • Availability Bias

    “Availability bias” is the tendency to give more weight to recent events, prioritizing the most immediate news as readily accessible in our minds, rather than considering historical examples and their lessons as well. This can affect how we perceive the current market status; potentially hampering our critical thinking abilities.

  • Framing Effect

    Additionally, the “framing effect” allows the presentation of information to impact our interpretation of it. When news headlines are sensationalized or emotionally-charged, our reactions can be easily swayed. It’s helpful to be observant of how market fluctuations and its corresponding media coverage affects our mindsets in order to fully grasp control of our financial well-being.

By knowing yourself, you know better how to best navigate the world around you — including the stock market itself.


Bumped has your back

The world might feel — well, unpredictable and intense right now. Despite the recent scares in the stock market and beyond, our philosophy has always been grounded in empowering the average consumer as an owner. In fact, fewer than 7% of Bumped users have sold their stock since our launch — and that average was even down in recent weeks.

By focusing on your ownership, rather than the finite details of stock prices, investors can shift their perspectives from potential semblances of anxiety to feelings of security and trust. Ownership is more holistic than trading: it extends the bigger picture while honoring you as an influential participant in the economy, market, and your own financial plan.

We offer the confidence in knowing that your holdings with Bumped will likely accrue even more in your favor over time as you continue to support the brands you love, establishing the foundation for you to become a longtime investor. So if the market returns to stability — as historically it consistently has — you can feel equipped to not only weather any market storm, but also sail through them with confidence.

Have questions? Our support team is available to answer any questions you might have related to your stock with Bumped. Send us a message through the app or email us at [email protected].

Contact us

Are you a financial institution or brand interested in working with Bumped to make your customers owners? Get in touch below!

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© 2021 Bumped Inc. All rights reserved. Use the following links to access Bumped Financial LLC's Privacy Policy, Terms of Use, Customer Agreement, and other Legal Disclosures.

The Bumped app and website are operated by Bumped, Inc. Brokerage services are provided by Bumped Financial LLC, member FINRA ↗/SIPC ↗. More about Bumped Financial LLC on FINRA’s FINRA BrokerCheck website ↗

Investing in securities involves risk, including possible loss of principal: Not FDIC Insured • No Bank Guarantee • May Lose Value. Past performance is not a guarantee of future results. Nothing on this site should be construed as an offer to purchase or sell securities.

Any market, economic and / or performance data shown is for hypothetical and illustrative purposes only. Data does not represent actual results.  Participation is only for investors who understand and agree to the risks inherent in their Bumped Accounts. Only qualifying purchases made according to the terms and conditions are eligible for stock rewards. Bumped does not charge brokerage fees. Bumped reserves the right to restrict or revoke any and all offers at any time.

Brands and brand logos shown are for illustrative purposes only and do not indicate specific offers from, or guarantees to participate with, any of the merchants shown. Offers and participating brands are subject to change without notice.

Investors receive shares of ETFs as rewards. Investors should consider their investment objectives, risks, carefully before investing. This and other information are found in the fund prospectus. Please read the prospectus carefully before you choose to invest.

Rewards are accrued for investment after qualifying purchases, but may be reversed if the qualifying transaction is later reversed. Bumped does not assume the risk of market movements for returned items or disqualified transactions. 

Bumped Inc., its subsidiaries, agents, and employees expressly disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services, and make no representation as to the completeness, suitability, or quality thereof.

A few notes on fractional shares: they’re typically not transferable between brokerage firms. If you want to transfer your Bumped account, you may have to sell your fractional shares first. Fractional shares can’t be put into certificate form or physically mailed, nor do they have voting rights.