Volatility has been at the forefront of many investors’ minds over the past couple of weeks. But in the midst of the short-term upheavals and reactions, it’s all too easy to lose sight of the longer term impact of volatility. In this blog I take a closer look at volatility as a measure of risk. Whilst it has its drawbacks, it also has some important advantages, particularly for long-term investors.
To state the painfully obvious, the coronavirus outbreak has led to a huge increase in market volatility over the past few weeks. In this blog, I look at the situation from different angle: instead of focusing on the immediate virus effects and policy responses, I dig deeper to explore some of the risks and opportunities that arise in volatile markets, and underline how important it is for investors to remain calm and stick to their principles.
ESG and long-term themes
Most of us are trying to do something to help the environment – indeed, for Christmas I was given not one, not two, but THREE reusable mugs/ thermos flasks (clearly people know of my coffee addiction). But how much impact are we really making, as opposed to just “virtue signalling” or, as my husband would put it, “helping the penguins in Somalia” (sounds great but is actually meaningless). ;