This week it was revealed that one of the reasons the Fed did not begin the forever coming rate hike was concerns over volatility in the market. At one of my previous firms we use to say “volatility is normal, and volatile.” That statement is still true today.

Volatility is always going to be present in equity markets. When that isn’t the case, we will all be looking somewhere else to get return on investment. Hopefully and likely, it will never come to that. Anything is possible, but that scenario is certainly not probable.

It is true that the current bull market has experienced unusually low volatility, considering the market hasn’t experienced a correction since 2011. The market typically whether it’s a bull or bear market has a correction every 12 months. I believe we are in the midst of a correction currently, but only time will time tell. I could always be wrong.

From 1928-2010 the S&P 500 averaged 61.9 days per year with a greater than a 1% swing. The median number of days over that period was 51.5 days.

We as investors should not want low volatility to continue, and we should not expect it to continue. We as investors need to embrace volatility and take solace in knowing that others are panicking and destroying their portfolios.

According to a chart by JP Morgan in their 4Q Guide to markets, the average investor returned an annualized 2.5% from 1994-2014. That is absolutely dreadful, over a period that saw the S&P annualized 9.9%.

Let’s not be in that 2.5% group, we are better than that.

– Wyatt Swartz

– 10/9/2015