What’s Causing Market Volatility and What Can We Do?
I read an interesting short article this morning on Seeking Alpha in which Todd Campbell discussed the rising stock market volatility that has been happening since the 1970s. The article entitled “Volatility Across the Decades: It’s No Wonder We’re Edgy” (click here to view) included the following graph that demonstrates the volatility he is referring to. He used the deviation of daily returns for each decade to measure volatility.
While this is probably not surprising to anyone who follows the market, it certainly causes concern for those of us who would like to retire in the next 20 years or less. I do have a theory about why this trend is happening, but you’ll have to wait until the fall issue of The Journal of Investing to read about it. It hurts to bite my tongue while I wait for something to publish, however, once it publishes I do look forward to putting forth some suggestions about how to improve the situation.
While I wait, I’m interested to hear what you think is causing market volatility and what, if anything, we can do about it.
Featured market volatility image courtesy of worradmu