Volatility: vol·a·til·i·ty/ˌväləˈtilədē/ noun def. 1. liability to change rapidly and unpredictably, especially for the worse. From Oxford 2. Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. ... For example, when the stock market rises and falls more than one percent over a sustained period of time, we would call it a "volatile" market.
Recently we have been in this type of market. What is our solution or principle to navigate these turbulent times of the market? "Investing in the stock market can be volatile. For this reason, we believe it is important to keep proper perspective when stocks rise or fall over short periods of time. History has shown that the odds of achieving a positive return are increased the longer the investment horizon."
A recent Bloomberg data report illustrated that there is a 53% probability of Positive return in the S&P 500 index on any given market day. 63% over 1 month, 69% over 3 Months, 77% over 1 year, 87% over 3 years, 92% over 5 years, and 97% over 10 years. That's indicative of the adage: "Stay the Course". Historically speaking, the longer you are in the market the better your potential for a positive return. Recently we have focused on portfolios consisting of Lower Volatility and high Quality Dividend allocations. Portfolios based on companies that have lower debt, higher cash on hand, and/or paying dividends we believe helps reduce the impact of volatile markets on a portfolio. It's not a guarantee of success but as a famous movie quotes, "May the odds be ever in your favor".
Discuss and review your goals and objectives with a financial professional. Take a measure of your risk tolerance. Many people have a very high risk tolerance when there is a raging bull market however when volatility picks up, and many pundits predict that it is a precursor to a market correction, "Bear Market", or Recession, someones understanding of their risk becomes secondary to the panic some they experience. That often leads to poor decisions.
We look forward to meeting with you and discussing your objectives and goals and assisting you in making decisions that may benefit you and your family
Source: Bloomberg
Data is for illustrative purposes only. Returns are not intended to imply or guarantee future performance. These returns were the result of certain market factors and events which may not be repeated in the future. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance. The index cannot be purchased directly by investors. This is meant for educational purposes only. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. Past performance is not indicative of future results. Investing involves risk, including the potential for loss.
08/19