If you have been tuned into the news recently, the stock market has been grabbing headlines across networks!
Major swings in U.S. stocks have been occurring for the past few weeks – a phenomenon known as volatility.
What is volatility?
Volatility occurs when there is a rapid movement of prices – it’s not limited to only stocks. In fact, volatility is encompassing of bonds, commodities, and other assets.
During market volatility, investors are concerned about the economy and its future growth potential. Fear causes investors to sell, driving prices down; optimism drives investors to purchase assets, increasing prices.
It’s confusing – investors can’t seem to make up their mind about their money! Investing is emotional – I mean it’s your money after all!
Although markets are volatile right now, sit tight and don’t panic!