Finance By James Dolan 12 things you cando aboutmarket volatility How to manage stock market turmoil—and your reaction to it It all started so well. The new year started in much the same way as 2017 ended – with North American equity markets continuing their march ever upward. It was a happy time, as investors were looking forward to an improving U.S. employment picture, a massive corporate tax cut and continued strength in a U.S. stock market that has performed admirably over the past several years. And then came March. Needless to say, things have changed. So far, the S&P 500 (a broad-based index that’s a good stand-in for the U.S. stock market as a whole) has experienced the most volatility it’s seen in seven years – and the year is only three months old. In fact, the index has moved by at least 1% either up or down on about 40% of all trading days so far this year. Even veteran industry professionals are having a hard time trying to figure out what’s been causing this extreme stock market volatility and (most importantly) what to do about it. In times of such uncertainty, it’s a good idea to batten down the hatches, take a closer look at stock market volatility and try to assess how you can manage your portfolio through the turmoil. Why is volatility happening now? Good question. And, as usual, there are plenty of people out there – analysts, economists, stock market pundits, professional money managers, maybe even your neighbour across the street – who have their own ideas and theories about why we’ve entered a period of protracted volatility. As well-researched and convincing as these theories may be, it’s important to understand that the market is a complex place and even experts are sometimes at a loss to explain the “stew” of economics, politics and human psychology on display at any givenmoment. That caveat out of the way, here are four factors which most economists and market-watchers agree are currently affecting the market. 30 | www.snowbirds.org
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