Market Volatility Is Nothing New

I’m tasked with writing financial articles for many internet sites and even a few publications.

I find this responsibility very taxing. Not because I find the subjects boring but because I work hard to make them interesting or at least safe to read before driving or using heavy equipment. Lately editors have asked me to write about recent market volatility. I find this assignment beyond taxing and more like futile. For as long as there has been a stock market there has been volatility. Up down good months and bad months. When are people going to realize they should expect volatility and even embrace it.

Let me give an example. In my experience if you tell a fan of red meat the local super market is selling T-bones at half off they will respond with giddy excitement. If you tell them the cost of beef is going up by 50% they will frown and curse. This reaction is the same for everything we buy in life so why should it be any different with stocks? When stock prices drop everyone should be happy since they will be getting more for their money.

Here is another example. Research from the gang at Motley Fool shows on average, U.S. stocks will drop by 10% every 11 months, 20% every four years, and 30% every decade. Furthermore, their analysis shows after stocks fall 7% to 9% in a month, they perform better over the next five years than they do after increasing 7% to 9%. The key is to be ready to pounce when the market pulls back for we are investing for the next five to ten years.. right? Of course I’m writing the article..silly reader. I’m joking but I am also trying to make a serious point.

If you don’t like roller coasters don’t invest in stocks. Take your cotton candy money and invest in Index Annuities instead.

To learn more about Guy Conger, view his Paladin Registry research report.  

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