Living with Higher Volatility, Published on Morningstar.com Website

  • Written by David
  • November 3, 2014 at 11:35 pm
  • 0
  • We are pleased to announce our article, Living with Higher Volatility, has been published to Morningstar.com website.

    Go here to read the full article online. (You may need to register with Morningstar to access the complete article)

    Go here to download the article in PDF format.

     

     

    Update November 9, 2015

    Historically the S&P 500 stock index experiences 3 to 4 pullbacks per year. A pullback being defined as a decline between -5% and -10%.

    In recent years however, the number of pullbacks has diminished greatly (see below). Now that we are moving back to a more normal historical pattern of price movements, (what we call volatility) even the normal pullback of -5% to -10% seem extraordinary right now.

     

     

    Chart Source: JP Morgan, Guide to the Markets Sept. 2015

    S&P 500 Index Year-to-Date Returns 2015

    With all the price movements this past year, the S&P 500 index, so far, is basically flat on the year; only showing a positive 0.71% return.

    Summary:

    Higher volatility is something we expected a year ago, and wrote about, and we are experiencing it today, one year later. We expect this volatility to continue for some time to come.

    All these price movements (volatility) begs the question, ‘is your portfolio right for you?’ How do you answer that question? To learn more, go here.

 

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