On Market Volatility

Last week, asset prices (equities, commodities, and others) globally had significant swings.

• Factors driving these moves included: 1) changing stimulus policies by central banks, 2) the Russia / Ukraine conflict, 3) increased inflation, 4) increased oil prices, 5) slowing economic growth, 6) heightened equity valuations, 7) rising levels of government debt, and more.

• The following chart presents the S&P 500 stock index volatility (VIX) since January 2000. On Friday, the VIX closed at 27, above the average of 19.9.

OUR TAKE

• Equity volatility, while heightened, is not at an unusual level. Volatility will likely continue in the short term and a sharp upward spike could occur as well.

• Market participants will focus on how policymakers address the risk factors cited above.

• As investors assess recent losses, the volatility presents new opportunities to consider. Maintaining a disciplined approach remains important.