One of our favoured Investment houses, SEI, has commented on the current position of the Stock Market’s volatility. The extended period of calm for equity markets in recent years has come to a halt, pulling global markets lower.
While declines can be disconcerting, they are a normal development in the course of market movements. The volatility serves as a reminder of the value of focusing on achieving goals rather than on daily stock price movements.
They comment that Investors have enjoyed a long period of relative calm in financial markets, making the return of market volatility an unwelcomed interruption. Volatility can be unsettling, but its been seen it before. Market movements of 2% or more have been frequent occurrences at various periods in the past, and declines of 10% or more have historically occurred about every two years.
In their view (and ours), putting energy into developing and maintaining an investment plan that is designed to help you achieve your goals within a timeframe and level of risk of your choosing is the prudent approach. This is the foundation of investment strategy. The objective is to create diversified portfolios designed to provide more consistent returns over time.
And as I constantly tell clients, it’s not the timing of the market, it’s the time in the market!