November 28, 2023 • 3 mins
Stock market fluctuations happen every day. Market indexes and stock prices may move up one day and they might move down the next. Volatility like this is normal, but the more dramatic the swings, the greater the potential risk. As you manage your investments, it’s important to understand the nuances of market volatility so you can stay the course during turbulent times.
Market volatility measures how much and how quickly prices move over a period of time. The market can swing up or down, but the bigger and more frequent the change, the more volatile the market is. It is measured by the standard deviation of price changes over time. (In statistics, standard deviation allows you to see how much something differs from the standard value.)
Increased volatility on the stock market can cause fear and uncertainty among investors, but consider this: Although double-digit declines occur, stocks have historically recovered from major downturns and delivered long-term gains.
Focusing on your long-term goals instead of daily market fluctuations can help you avoid making emotional decisions about your portfolio.”
It’s tempting to react impulsively when markets fall sharply. But instead of selling off your stock or changing the allocation of your long-term investment portfolio, this is a good time to speak with an investment professional.
Patelco members have access to CFS Financial Advisors1 who can help identify investment options that may help minimize volatility within your portfolio without cashing out on growth-oriented investments. Schedule your in-person or online consultation today!
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1 Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Patelco Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.