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Many of my shares have fallen in recent days, as we’ve seen a fresh bout of stock market volatility. In this piece, I want to explain what I’m doing with my portfolio in the face of these tough conditions.

Why did markets fall last week?

Stock markets are falling as investors price in a growing risk of recession in key markets such as the US and UK. Fears of a slowdown were stoked last week by warnings from US retail giants Walmart and Target of surging costs and slowing sales.

Here in the UK, many otherwise healthy businesses are warning of the impact of rising costs and supply chain problems. One small company I follow expects a delay of up to one year on some electronic components, for example.

The situation isn’t easy. But recessions come and go quite regularly, in historical terms. As a long-term investor, my aim is to look through short-term headwinds and focus on staying invested in good businesses.

A reality check is probably useful too. So far this year, the FTSE 100 has fallen by less than 5%. Over the last 12 months, the index is still up 5%. Not exactly a crash.

My stock market strategy

My investing strategy is to focus on individual companies, rather than big picture trends. I know I can’t predict what will happen to the economy over the next 12 months. So I don’t try. Instead, I spend my time and energy understanding the things I can control.

For example, I can make sure I invest in companies that have high profit margins and a track record of growth. I can choose to avoid businesses with too much debt, wafer-thin profit margins and slowing sales.

Once I own a stock, I try and follow Warren Buffett’s advice that investors should ignore share price movements “as long as you’re comfortable with the holding”.

Buffett is known for his focus on owning good businesses and ignoring short-term share price slumps. That’s my ambition too.

What I am doing now

Even though I write about shares nearly every day, I don’t check my portfolio all that often. What I’m more likely to do regularly is to look for buying opportunities. These might be shares I already own, or companies on my watchlist that I’d like to buy when the price is right.

Right now, I’m starting to see more of these opportunities opening up. I expect to be buying shares over the coming weeks.

The only stock I’m planning to sell right now is FTSE 250 firm Homeserve, which has just received a takeover bid. Instead of waiting for the bid to complete later this year, I’ll probably sell the shares now at a small discount to the bid price. This will free up some cash for me to add new shares to my portfolio.

Overall, I’m excited by the long-term opportunities I can see for my portfolio.

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