Is volatility a bad thing?
Take a closer look. It might just be a gift.
Many a study has shown that we humans tend to experience the pain of loss more acutely than the joy of gain.
So, it’s hardly surprising that many see market volatility as a red flag.
But for the seasoned investors, volatility can be a gift.
That’s because it creates a disconnect between the true value of an asset and its market price, allowing those in the know to spot opportunities for bargains or windfalls.
Consider a volatile stock whose price fluctuates wildly in the space of days, weeks, months even, but trends upwards over time.
If you’re investing for the long term, that’s an opportunity to buy on the dips and wait for the outlays to grow over time.
Time in the market, rather than timing the market.
For short-term traders, it’s all about reading the peaks and troughs; buying low and selling high.
Either way, it can be a white-knuckle ride.
So it’s worth having an ally on your side who can keep a cool head while all about you are losing theirs.
Receive tailored solutions that best suit your cash management, forex, interest rate, and commodities trading & structuring needs.
Turn your investment goals into reality with Investec’s comprehensive investment management services and advice, backed by our truly global investment process.
Get Focus insights straight to your inbox
Please complete all required fields before sending.
Do shaky markets warrant a retreat to cash?
Sometimes safe havens aren't quite as safe as they appear.
Here’s a little something you might not know: historically, individual investors make a significant percentage of their annual returns in just a few days of any given year.
Trouble is, nobody knows for sure when those days will be.
If you’re not in the market for some or all of them, you may end up feeling like the plain-clothed kid at a fancy dress party.
Figuring out when to take profits and when to stay invested requires deep expertise and an understanding of how much risk you can afford at any given time.
That’s where a trusted partner comes in.
So, consider that cash has its place But it probably won’t deliver inflation-beating returns after tax.
Don’t ignore your FOMO.
Will climate change the financial terrain?
The climate emergency is real. Fortunately, so too is the opportunity to make a positive impact, along with a healthy profit.
Some would have us believe that the jury is still out on climate change.
Convenient as that view might be, it just isn’t true.
The jury came back decades ago and the verdict is unanimous.
Weather patterns are changing short, medium and long term.
The hottest years ever recorded have come one after the other in the last decade.
Certain parts of the world are predicted to become uninhabitable in the not too distant future, while low-lying coastal communities will be under serious threat from rising sea levels.
Migration from these places will be disruptive at best, and at worst economically detrimental and the catalyst for social unrest.
But humanity will find a way through as we always do, and as with all risks, this will come with some unexpected opportunities.
From clean energy to weird scientific experiments on an inter-planetary scale.
Some of these ventures will go down like ships striking melting icebergs, but others will make a lucky few spectacularly wealthy, and they may just save the world in the process.