Volatility in the markets create opportunities

Wealth




Volatility in the markets create opportunites

In 2017 we saw a relatively low volatility in global equity markets, while 2018 has to date painted a completely different picture.

The increased volatility can be attributed to concerns over global growth as well as fears around the withdrawal of liquidity.

It is believed that while market volatility manifests itself in lower returns over the short term, it creates a better point of entry to the market for long-term investors.

Volatility presents opportunities as it allows for improved entry points into the market, presenting the opportunity to buy assets that you need over the long-term, at better prices. Thus, investors can use volatility to their advantage.

 

We have seen in the past how investors missed out on one of the best bull markets of all time because they panicked and got out of the market. The key during periods like this is to keep a cool head and as a result of extreme volatility increase your investment savings.

 

Graham Tucker, manager of Old Mutual Balanced fund said: “When investors panic, they shorten their time horizon significantly and this can have an extremely detrimental impact in the long term. Don’t let volatility rule your emotions – volatility can work in your favour when playing the long game”.