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Title: how can a wise investor battle market volatility Post by: Tito on Mar 4, 2015 How can a wise investor battle market volatility
Title: Re: how can a wise investor battle market volatility Post by: habiba on Mar 4, 2015 The most important thing is to construct an especially large and diversified portfolio to immunize yourself from the gyrations exhibited by individual stocks. The corollary is that you should place only small bets on any one stock’s prospects.
Allan Timmermann, a finance professor at the University of California, San Diego, draws an analogy to the turbulence that leads airline pilots to require travelers to take their seats and fasten their seat belts. “If turbulence were to occur completely randomly, then this requirement would make little sense,” he says. But it doesn’t, which is why pilots can turn on the seat-belt sign after the first experience of such turbulence and turn it back off after the ride has been smooth for a while. “The same is true for the stock market,” Timmerman says. Those unwilling to tolerate as much volatility as seen in June, therefore, might want to reduce their equity exposure until the market is calm for several weeks. The URL below leads to the full article, I think it has what you're looking for :) |