Volatility in the market isn’t something investors wish to experience. Stability presents far more benefits to an investor’s psyche. Experiencing 10% growth for three months followed by a 9% decline creates anxiety. Depending on when you enter the market, volatility sometimes contributes to losses. No investor wants to experience this type of outcome. The market, however, doesn’t always give investors what they want. HCR Wealth Advisors, a registered investment advisory firm, believes that volatility can be unavoidable at times. HCR Wealth has published an article online suggesting that 2018 may prove to be a volatile year for investors.
Based on the ups and downs of the stock market so far, it would be difficult to argue with the assessments made by HCR Wealth Advisors. The remainder of 2018 for the stock market may stabilize, but based on the market’s performance so far, current indications suggest the year has more volatility in store.
What might cause additional volatility in 2018? Ironically, the low volatility of 2017 potentially sets the stage for a rollercoaster ride in 2018. Just as the phrase “what goes up must come down” suggests, periods of low volatility create conditions in which high volatility can become almost unavoidable. This doesn’t mean a period of high volatility is 100% guaranteed. However, the odds suggest the trend going in that direction. An experienced firm like HCR Wealth Advisors wouldn’t studies and analyzes the market trends. And an examination of historic trends lends credibility to an expectation of greater volatility.
Volatility doesn’t have to be extreme. Mild volatility remains a possibility as well. Investors surely would prefer a mild change, but no one really knows how things are going to turn out exactly. In general, investors should be prepared for swings in the market.
Investors should brace for volatility, but not overreact. A panicked response probably wouldn’t lead to a desirable outcome. For more news on market trends, follow HCR Wealth on Facebook.
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