{"id":10123,"date":"2022-01-27T15:54:47","date_gmt":"2022-01-27T15:54:47","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=10123"},"modified":"2022-02-26T13:05:36","modified_gmt":"2022-02-26T13:05:36","slug":"whats-ahead-for-market-volatility","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/whats-ahead-for-market-volatility\/","title":{"rendered":"What&#8217;s Ahead for Market Volatility?"},"content":{"rendered":"\n<p><em>Jerry Z. from Toms\nRiver, N.J. asks: <\/em>Hello Mitch, I\u2019d like to hear your thoughts on the\ncurrent market volatility and the big pullback. Does the market have further to\ngo? How long do you think this will last? And what should retirement investors\ndo? I know that\u2019s three questions wrapped into one.<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing, Jerry. I\u2019m sure many readers are\nwondering all of the same things you are, and it\u2019s quite all right you asked\nthree questions. They\u2019re all important.<\/p>\n\n\n\n<p>As I write, the stock market as measured by the S&amp;P 500\nhas officially entered correction territory, which means a decline of -10% or\nmore. The tech-heavy Nasdaq and the small-cap Russell 2000 index are also well\ninto correction territory. Selling pressure abounds. <\/p>\n\n\n\n<p>This downside volatility is to be expected \u2013 over the last\n42 years, the S&amp;P 500 has experienced an average intra-year correction of\n-14.0%, but still finished positive in 32 of those years. In other words,\nmarket volatility and corrections are a normal and natural part of equity\ninvesting. Remember\u2013 while volatility and market corrections are unpleasant, <em>they are not uncommon.<\/em><\/p>\n\n\n\n<p>____________________________________________________________________________<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-volatility-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_blog_2022_01_27&amp;content=volatility_guide\">What To Do When the Market Experiences Downside Volatility <\/a><\/strong><\/p>\n\n\n\n<p>It\u2019s easy to fall into emotional decision-making when the market fluctuates. You may be asking yourself questions like: <em>What should you do when market corrections occur? Could volatility be an opportunity?<\/em><\/p>\n\n\n\n<p>Instead of giving into emotional decision-making,\nI recommend finding a strategy that could help you steer through any financial\nchange Our guide, \u201cHelping You Manage Market Volatility,\u201d will provide you with\ninsights and tips to do just that. Get answers to questions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Market downturns can and will occur, but what should you do?<\/em><\/li><li><em>How can diversification help you manage volatility without compromising your returns?<\/em><\/li><li><em>When volatility is too much for you to handle, how can a money manager help?<\/em><\/li><li><em>Can volatility actually be an opportunity?<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want to get answers to the questions above, click on the link below to download this guide today!<br> \u00a0<br><strong><a href=\"https:\/\/go.steadyinvestor.com\/arrow-volatility-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_blog_2022_01_27&amp;content=volatility_guide\">Download Zacks Volatility Guide, \u201cHelping You Manage Market Volatility.\u201d<\/a><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-volatility-guide?source=website&amp;medium=blog&amp;term=mitchsmailbox_blog_2022_01_27&amp;content=volatility_guide\">1<\/a><\/sup><\/strong><\/p>\n\n\n\n<p>_____________________________________________________________________________<\/p>\n\n\n\n<p>As for how long the market correction will last and how much\nlower it may go, your guess is as good as anyone. Historically speaking,\nthough, market corrections tend to last a few weeks or a few months, but not\nlonger. They are generally short-term re-pricing events, with the market often\nrecovering in as little time as it took to decline. If the medium-term outlook\nis for strong economic growth and rising corporate profits \u2013 which I believe it\nis \u2013 then fundamentals should ultimately win the day and spur a market\nrally.&nbsp; <\/p>\n\n\n\n<p>The fact that volatility tends to strike in scary clusters\nmakes this kind of medium-term to long-term thinking very difficult for many\ninvestors. We can easily get drawn into intense focus over what\u2019s going to\nhappen <em>tomorrow<\/em> versus what\u2019s going\nto happen a year or five years from now. Short-term thinking is\nemotionally-driven; long-term thinking is data-driven. The latter is an\ninvestor\u2019s key to success, especially in times like these.<\/p>\n\n\n\n<p>As for your final questions about what retirement investors\nshould do, it depends on your investment time horizon. Hopefully, you are\nplanning for 20+ years of retirement. With that in mind, it is important to\nthink about your total years in retirement \u2013 or your life expectancy \u2013 as\nroughly equal to your investment time horizon. A market correction over a few\nweeks or months should not materially impact your long-term total return over\n20+ years. <\/p>\n\n\n\n<p>Your retirement asset allocation should also help you navigate\nvolatility. If market fluctuations keep you up at night, then it probably makes\nsense to be thoughtful about how much equity exposure you have in your\nportfolio. Equities can help you generate the growth you need overtime to help\nfinance your retirement, but they also come with some volatility. It\u2019s all\nabout finding the right balance. <\/p>\n\n\n\n<p>Another piece of advice I would give you with regards to\nnavigating volatility in retirement is to do what you can to ignore it. If\ninvestors get swept up in every market selloff or string of negative news in\nthe financial markets, it increases the likelihood of abandoning a long-term\nstrategy and making \u2018knee-jerk decisions.\u2019 Having thick skin in the face of\nvolatility is an acquired skill \u2013 it takes practice and patience. <\/p>\n\n\n\n<p>At the end of the day, if you invest in a diversified\nportfolio with equity and fixed income exposure in-line with your long-term\ngoals and objectives, and you stick to your strategy over a long investment\nhorizon like 20 years, you have a high probability of experiencing the outcome\nyou want. It\u2019s all about making your plan and sticking to it. <\/p>\n\n\n\n<p>To help give insight into some ways you can do\nthis, check out our guide, \u201cHelping You Manage Market Volatility.\u201d<sup>2<\/sup>&nbsp;It\nwill provide you with insights and tips to do just that. Get answers to\nquestions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><em>Market downturns can and will occur, but what should you do?<\/em><\/li><li><em>How can diversification help you manage volatility without compromising your returns?<\/em><\/li><li><em>When volatility is too much for you to handle, how can a money manager help?<\/em><\/li><li><em>Can volatility actually be an opportunity?<\/em><\/li><\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and want\nto get answers to the questions above, click on the link below to download this\nguide today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mitch takes a look at the current market pullback and offers his viewpoint on how investors should respond to volatility<\/p>\n","protected":false},"author":3,"featured_media":7436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-10123","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10123","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=10123"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10123\/revisions"}],"predecessor-version":[{"id":10212,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10123\/revisions\/10212"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=10123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=10123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=10123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}