In an effort to continue to communicate with you more frequently, I want to offer a quick word on the subject of market volatility.
Volatility is defined as a tendency to change quickly and unpredictably in either direction. It is important to note that volatility is the market going both UP and DOWN. Although it has a negative connotation, volatility is not inherently negative. Short term volatility can offer an opportunity for the goal-focused long-term investor. Although we cannot time the market, giving in to fear of downward volatility and selling creates opportunity for those willing to buy while prices are low. Those buyers can then benefit from upward volatility as prices recover. I would even argue that opportunistic buyers with their eyes on the horizon would prefer higher volatility as it gives more opportunities for purchases at sale prices. I would encourage you not to confuse volatility with risk. The sharp market selloff due to the Covid-19 pandemic is an example of temporary volatility not permanent loss. It only becomes permanent when and if we sell. Therefore, volatility is the friend of the long-term investor.
Please do not hesitate to email or call me with specific questions pertaining to your investment plan and long-term goals.
Please stay safe and healthy.
Sincerely,
Gavin S. Parker