The oft-repeated phrase for almost every family road trip in recorded history—“Are we there yet?”—is also appropriately asked by investors experiencing stock and bond markets in 2022. Although we’re not traveling together in the back of a wood-paneled station wagon to grandma’s house halfway across the country, we are all experiencing an uncomfortable journey of volatility. Questions that I hear and questions I’m asking myself along this investing volatility voyage include: Have stocks ... [Continue Reading]
Articles and resources related to Market Volatility.
The market volatility that caused investors to experience strong losses in early 2022 has returned, driving the S&P 500 to new lows for the year on Monday, September 27. Whenever there is volatility, it's helpful to ground the emotions we may feel in context. Here's a brief look at how we got to this point. Causes of Increased Inflation and Volatility Markets entered 2022 with concerns about whether inflation was going to prove to be persistent or transitory, and two events early ... [Continue Reading]
In what is one of my absolute favorite financial books of the past decade, The Psychology of Money, Morgan Housel introduces us to the concept of “appealing fictions.” Housel defines an appealing fiction as follows: Something you desperately want to be true because of potential huge upside.Is backed up by limited or no data, observation, or reasonable common sense.Polarizing in nature drawing people into factions or tribes. He goes on to describe these “extremely powerful” narratives ... [Continue Reading]
Ben Franklin famously penned, “in this world nothing can be said to be certain, except death and taxes.” I would venture to guess that if he were around today, he would allow me to include stock market volatility as a third item on that list. But fortunately, unlike the other two examples, market volatility is typically short-lived and doesn’t have to be a permanent impediment to future success. In fact, sudden changes in prices to reflect newly available information is normal and ... [Continue Reading]
With nearly 40 years of industry experience, there are several market drawdowns that stand out in my mind, each of them with their own characteristics. We’re hearing a lot about volatility today, and we often do when the S&P 500 dips. But it’s important to remember that volatility applies just as well to times when it’s up. After all, the definition of volatility is the tendency to change quickly and unpredictably.1 In short, volatility is our constant companion and inherent to an investment ... [Continue Reading]