A 15% plus spike in the volatility index (called VIX), a sharp bump up, 3%+ in gold, and 5%+ in oil don’t triangulate too often. In the past two decades, this happened thrice – once in 2001, then in 2008, and now on Friday.
Events like this want you to look for parallels and patterns. You wonder if the consensus in the market ran this high on earlier occasions. We look closer at history to see if it will repeat in the same way. While there are no easy or ready answers, our insecurity will still make us think too hard on the possibility and ask ourselves what we really need to do.
The coming months are certain to see volatility rise, anxiety spike, and stomachs churn. Portfolios will certainly see sharp swings and flows are going to decide the market’s direction. Investors must take a very disciplined approach towards owning, buying and selling stocks.
A calm rational approach will help navigate this phase gainfully and effectively manage to convert the volatility into an opportunity.