#1 Rule to Remember When Markets Turn Volatile

Let’s talk about market volatility…

What is Market Volatility?

Volatility is an investment term that describes when a market or security experiences periods of unpredictable, and sometimes sharp, price fluctuates around the moving average – both up and down. The bigger and more frequent the price movements, the more volatile the market is said to be.

During periods of high volatility, it’s normal to experience feelings of fear and uncertainty. But, when markets turn volatile, the #1 thing you should remember is: Stick to your plan.

The urge to do something – anything! – can be overwhelming. But the problem is when you change course, you’ll often wind up making things worse, either by selling too low immediately after a market downturn and missing out on future gains, or by chasing performance after markets take off. 

Remember: it’s time in the market, not timing the market. And if you’re not yet convinced, here’s a staggering statistic: Over the last 20 years, 24 of the 25 worst trading days were within one month of the 15 best trading days.

So, in moments of high volatility, sticking to the plan is the best advice you can get.

Related: 3 Ways to Handle Market Uncertainty

If you are looking for financial guidance, or need to put a plan in place, we invite you to schedule a complimentary consultation with our team of financial advisors.