Volatility Isn’t Always a Bad Thing

Kali Hassinger Contributed by: Kali Hassinger, CFP®

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If you’ve been paying attention to the markets this year, you’ve certainly noticed that the days of 2017’s slow and steady positive returns have disappeared.  Instead, 2018 has been full of daily market ups and downs, which, it turns out, is actually normal! 

With the calm and comfortable markets of 2017, it’s easy to let our short term memory overshadow previous years.  2018, on the other hand, has created feelings of investor anxiety as the markets switch between red and green on a daily basis.  The word volatility alone often has a negative connotation.  However, in relation to your portfolio, volatility also includes positive returns! 

Post 2008, overall portfolio and market returns have been positive. However, as presented in the chart below, each year since then has been filled with daily market movements of 1% - both up and down!  2017 is by far the greatest outlier within the most recent 10 year average.

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Investors have to be willing to endure the occasional market rollercoaster in order to reach long-term goals.  Even though we work to minimize volatility over time, avoiding it altogether isn’t realistic.  Try to remember that we never base your plan on market returns of a single day or calendar year.  Staying disciplined and committed to your financial plan can help you filter out the noise and focus on your long-term goals. 

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®


The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007 the MSCI World Index consisted of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Investing involves risk and investors may incur a profit or a loss. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.