How to Cope With Market Volatility

In August, the volatility index VIX spiked to 28.3, its highest level since 2011. With volatility here to stay, Morningstar contributor John Waggoner explains how to brave the bumps

External Writer 20 October, 2015 | 8:00AM
Facebook Twitter LinkedIn

If you start to whimper just a little bit before you read the market news, it's probably because stocks are more volatile now than they have been since 2011, when oil prices soared, U.S. debt got downgraded.

Volatility, of course, is really a euphemism for "scary down days, often in succession". No one complains about a market with wild and crazy gains. But heightened volatility can not only wrack your nerves, it can make you do silly things with your money.

It's no wonder the market feels so volatile. It is. Let's start by looking at the magnitude of recent market volatility. One measure is the CBOE's VIX index, sometimes called the "fear index." The index measures the expected movement of the S&P 500 in the next 30 days. It's a weighted blend of the price changes on options in the S&P 500.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

External Writer  .

Audience Confirmation

By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement