Market Insights: Market volatility over time
Milestone Wealth Management Ltd. - Feb 26, 2016
Market volatility over time From time to time, and especially when markets are in a correction or a bear market like in Canada at present, we receive a few comments from clients that markets seem ever more volatile.
Market volatility over time
From time to time, and especially when markets are in a correction or a bear market like in Canada at present, we receive a few comments from clients that markets seem ever more volatile. We have even heard from clients that markets seem more complicated and more difficult to forecast now than in previous years. Is this really the case? From our perspective, there's no doubt that the quicker transmission of information and increasing prevalence of online media, in addition to technological advancements in high frequency trading, have had an effect on market movements. However, this volatility is more in the day-to-day, or even intra-day, time frame. As long-term asset managers, the process and strategy behind our portfolio management approach is meant to produce returns adjusted for both risk and inflation over a full business cycle, and thus we find the following commentary from financial technology company The Motley Fool very interesting indeed, and we wish to share these insights with you. Please click through the link to read. The end result of the author's analysis is that no, markets are not currently more volatile than they have been in the past - not even on a daily basis - and fall mostly in line with the range of last three decades. In fact, weekly and monthly volatility from 2010 to 2015 is actually lower than the previous four decades, and annual volatility is the lowest it has ever been in the last hundred years. Surprised?