A Different Kind of Volatility

It’s not just the stock market that’s seen a spike in volatility. It’s opinions about the stock market from so-called market experts.

The rapid-fire change in outlook was driven home for me the other week when two news alerts came out that showed just how fickle views can be. The first headline blared that a global bear market was just getting started. Less than 24 hours later, most everyone agreed the markets were primed to rally in 2019.

The whipsaw of opinion would be funny if it weren’t for the headaches it causes professionals trying to be the voice of reason for clients who understandably fear the unknown. It would be irresponsible for me to add to the noise of short-term predictions by offering up yet another guess dressed up with investment buzzwords. Instead, I’ll leave you with the chart below that shows how shares of small companies have performed after other sharply negative quarters.

Do these numbers mean that we’ll see a double-digit rebound in the coming weeks and months? Honestly, no one can say. What they do suggest, in my view, is that investors who have taken a longer view, or have avoided falling victim to the never-ending cycle of analysis, have historically done pretty well for their clients.