Tag Archives: market volatility

With markets so calm, it’s easy to become complacent about the corrosive effects that volatility can have on long-term investment success. If you don’t need the money for a long time, you can ride out the inevitable market squalls but if you’re close to or already drawing from those funds, volatility can be costly...Let me explain further.

Almost all assets see fluctuations in value over time but, while price swings are a common phenomenon in most asset classes that exist, they are the most famous in the stock market. Today’s infographic comes to us from Fisher Investments, and it serves as an introduction to the concept of volatility, along with offering a perspective on volatility’s impact on investments.

While gold has traditionally been seen as a tactical way to help preserve wealth during market corrections, times of geopolitical stress or persistent dollar weakness, we think there is a case to be made for gold as a core diversifying asset with a long-term strategic role in multi-asset portfolios...as gold’s historically low or negative correlation with most other asset classes argues in its favor...This article looks at how gold-backed assets have behaved over time as a portfolio diversifier, tail risk hedge and inflation hedge.

Reasonable people understand that the stock market can go down as well as up so after a six year run that pushed the Dow Jones up dramatically, maybe it’s time to stop looking for reasons to buy stocks and begin looking for reasons to sell. This article presents 7 sound reasons to do the latter.

As investors we crave a specific plan of attack for every conceivable market scenario so here are five alternative courses of action (other than cash) to consider in the current market. (Yes, it’s possible to put the market volatility to work for us.) So writes Louis Basenese (www.wallstreetdaily.com) in edited excerpts from his original article* entitled The Five Smartest Responses to the Stock Market …

The rubber band of Mr. Market has been stretched tight and is ready to release. The problem is that it is impossible to know which end is going to snap. Will it snap up or snap down?

In proclaiming buy-and-hold investing to be dead, the pseudo-experts masquerading as financial advisors have abandoned the fundamental principle of investing: buying undervalued assets - and then giving those assets the time necessary to mature. Instead, these charlatans have forced their clients to become short-term gamblers. Worse still, they are now consistently steering their clients toward the worst possible asset-classes, stocks and bonds, rather than the best ones [simply because they do not] understand the fundamental conceptual difference between risk and volatility. In a market populated by panicked lemmings, we cannot avoid volatility. However, we can and must reduce risk - which begins by building an allocation of history's true safe haven asset, precious metals. [Let me explain more about what risk and volatility are and are not.] Words: 1080

The global economy is going to endure a significant deleveraging cycle as we move through 2012 - one that will affect most if not all parts of the developed world. It will be accomplished by some combination of default and write-downs, debt repayment and rising savings rates. [Below I outline 8 areas of behaviorial change to watch for in 2012 and 7 ways to invest in such a fluid economic environment.] Words: 1186

On a theoretical basis, everyone knows to buy when others are fearful, to be contrarian, to avoid panic. On a practical basis, [however,] hardly anyone has the discipline and courage to act. [Below I outline] three ways that the individual investor can profit from the current volatility. Words: 614 So says Jeff Miller (www.oldprof.typepad.com)  in edited excerpts from an article* which Lorimer Wilson, …