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Market Volatility and Long-Term Investing

Woman looking at computer screen

Market volatility is an inevitable part of investing and a long-term investment strategy can provide a degree of insulation against the perils of emotion, impulse, and even potential regret in future years (Jackson, 2022). In times of significant volatility, staying the course can feel intimidating. With that in mind, here's an overview of volatility, the current market, and opportunities to mitigate negative impacts. We hope it offers you some peace of mind as volatility continues to impact investment portfolios across the world.

Volatility Explained

What is market volatility anyway? One way to describe market volatility is the intensity and frequency of an asset’s or market’s price movements. The wider the trading ranges and price swings are, the more volatile the market environment is.

Volatility gets a bad rap, as the term is often associated with sharp, accelerated downward price movements in a market. But sharp price increases equate to volatility, too.

Present Market Volatility & Your Response

Currently, major U.S. stock indexes are battling a higher interest rate environment, soaring inflation, war, supply chain issues, and more. All of this has culminated in accelerated downward price movements.

Here's how investors can mitigate the impact of this volatility:

  • Being prepared - Focus on diversification and creating a balanced portfolio, both of which will minimize the short-term impacts of downside market volatility.

  • Identifying opportunities - As unsettling as downward price volatility on assets can be, it can create opportunities for select long-term investors with certain risk tolerances and time horizons. Dollar-cost averaging is another strategy that many investors employ during times of discounted asset prices. Let me know if you'd like to look into whether any opportunities exist for you.

  • Staying the course - Ultimately, it’s important to keep in mind that in most cases, long-term investing trumps short-term market trading over time.

Remember: Volatility Is Inevitable

Market volatility can be unsettling, but it’s critical to remain mindful of the long-range game while keeping in mind that volatility is an inevitable component of market cycles and long-term investing. Patience and discipline are key in times like these.

If you have further questions about financial impacts do not hesitate to email us at, call 248-733-4344, or set a time to talk on our calendar

The information contained in this material is for general information only and are those of the author, and not a recommendation or solicitation to buy or sell investment products.

This article contains links to third party websites. Stalt Financial does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Stalt Financial's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.


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