Commentators have been blaming excessive government debt, the stimulus in Europe and government intervention for recent market instability, but current volatility is well within the normal historical range.
Perception of the volatility increase is often encountered due basically to emotions that come to the forefront when stock trading, and this may not be a logical approach. The “fear factor” is an ever-present condition – within any market situation. If there is a bull market, traders will worry about when the market will take a downturn, when the market is bearish, traders are concerned about “bottoming” and missing opportunities, and a myriad of other scenarios.
Analysis of Market Volatility
Data from Wilshire Analytics, through examining the monthly stock returns of the Wilshire 5000, which is the total US stock market, certainly provided a bit more of a clearer picture in regard to the volatility perception!
Market volatility is definitely a part of our daily stock market trading lives. There are many great ways to benefit from the market volatility is to “re-balance, play the market cautiously but also remain active”.
The method I employ, to put this advice to a beneficial and profitable use, is to play the options market – this works, if properly administered, in any market environment.
“The markets remain as volatile as ever and this will always be the case.”
”Success is simple. Do what's right, the right way, at the right time.”
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