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Vola-phobia: Don't Fear Volatility

The following are highlights from:

'Wesbury 101': an economic comentary by Brian Wesbury - Cheif Economist at First Trust Portolifos.

  • Many investors have a phobia when it comes to volatility: let’s call it VOLA-PHOBIA. They think volatility itself signals an unhealthy market. But fundamentals drive markets over time.
  • In the short-term, like in early 2016, during Brexit and again during the US Presidential elections, volatility can scare investors even though fundamentals suggest these fears are overblown.
  • Profits are rising and even if we incorporate higher interest rates into our models, stocks in the US remain undervalued.
  • Don’t fear the volatility, embrace the opportunities it creates.

Watch the full video at: https://www.ftportfolios.com/Commentary/EconomicResearch/2018/3/22/dont-fear-volatility

 

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