If you watch or read financial news you'll hear the work 'uncertainty' thrown around a lot. Or you may hear them say how 'volatile' of a time this is for the market.
The pundits always attribute this market volatility to something coming up; the Presidential election, the Fed policy on interest rates, inflation reports, etc.
Here's the thing: the market has always been uncertain and volatile.
If the market were predictable and steady it wouldn't generate the returns it does. If you want predictability the stock market is not the investment for you. Bonds, CDs, or money-market funds offer predictability and smoothness....and that is why on average they don't earn the same level of return.
Check out this piece from JP Morgan:
The bars show the S&P 500 return for the year. The red dots below each bar show the biggest dip the S&P 500 experienced that year.
What you should notice is that most years are positive, and during those years we still experience market dips.
THIS IS NORMAL.
Telling investors how uncertain the market is right now, or how volatile things are is usually just a scare tactic to get you to buy their product or strategy. (Or in the news case, to tune in tomorrow.)
Kommentit