Market Volatility… it’s back.

  • Written by David
  • October 10, 2014 at 5:49 pm
  • 0
  • vol·a·tile

    adjective \ˈvä-lə-təl, especially British -ˌtī(-ə)l\

    : likely to change in a very sudden or extreme way
    : having or showing extreme or sudden changes of emotion
    : likely to become dangerous or out of control

    Examples of VOLATILE

    The stock market can be very volatile.

    Volatility has been on vacation for most of the past five years (minus the fall of 2011 when the market last corrected by 20%) as Central Banks have ‘printed’ money in an effort to jump-start local economies. The insidious side-effect of this money printing has been to greatly reduce, if not extinguish historical, and normal, market price fluctuations, or what we simply call volatility.

    An era is ending: for over half a decade, nearly worldwide, zero interest rates suppressed volatilities. That is over. The first sign of this evolution came over a year ago when the bond market experienced the “taper tantrum” as then Fed Chairman Ben Bernanke alluded to forthcoming rising interest rates. Since then, the re-volitization process has morphed to currencies, commodities, and stock prices.

    More and exciting volatilities lie ahead.

    … David Kotok, Chairman and Chief Investment Officer, Cumberland Advisors.

    To read our full article go here.


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