Outlasting Market Volatility

White Oak Wealth Management
Investment Insight
Conquering Market Volatility

It is arguably more difficult to be a disciplined investor today than it has been at any point in history.  DIY investors now have access to the same up to the minute information that professionals use.  Individuals become overwhelmed by unending streams of data, opinions from TV talking heads and “news” alerts on mobile devices. And when markets become volatile, the drumbeat of opinions grows louder and more frequent.  No wonder then that so many individual investors (and some professionals) abandon their investment strategy in the face of volatility and the short-term hysteria it generates.

Market volatility is one of the main reasons our clients have chosen to work with us.  We never stop extolling the virtues of successfully defining an appropriate investment strategy AND maintaining a disciplined commitment to the strategy.  We battle two of the strongest human emotions; fear and greed.  

Professional investment discipline typically increases the probability of achieving an investment goal over the long-term.  It is also important to note, that if your time horizon is not defined as “long-term” then your investment strategy and risk level should reflect that.  

The Benefits of Investment Discipline:
Investment strategies are typically constructed to grow assets in favorable markets and provide protection in difficult markets.  The benefit of such a strategy is to minimize losses when markets perform poorly.  These slides from BlackRock show that only capturing 89% of both bull and bear markets produced better results with less volatility than capturing 100% of the same returns.   

Discipline also reinforces the benefit of remaining invested.  Missing only five of the market's top performing days over the past 20 years reduced total return by $134,900.  If you would like to learn more about how our commitment to disciplined fundamental investing can help you, please email or use the Contact feature.