Q&A: Timing & Volatility

Question

Wealthflow, I’m not a client but I have a question.  Stock market volatility is currently quite high. Does it make sense for investors to get out of the market until volatility settles down?

Answer

If the current high volatility makes you permanently averse to stock market volatility, and the inevitable variation in market volatility, you should get out.

But you shouldn’t have been in the stock market in the first place since fluctuations in volatility are the norm. If you eventually want to come back into the market, then you shouldn’t leave. Bouncing in and out of the market is risky if your desired long-term asset allocation involves exposure to the market.

Duncan R Glassey
Senior Partner – Wealthflow LLP

duncan.glassey@wealthflow.com

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