In recent weeks we've seen an incredible amount of volatility in stock markets. When I say volatility I am talking about the wild market swings up and down. The chart below shows just how much the FTSE 100 plummeted last month (click to enlarge).
We've not seen levels of volatility like this since the dark days of the financial crisis back in 2008. As a DIY investor it certainly hasn't been a comfortable ride. The harsh reality is that increased volatility is here to stay, for a while at least. After last month's sell-off stock markets stabilised, albeit at much lower levels, yet the underlying causes for the sell-off remain. A slowing Chinese economy and an impending interest rate hike in the US are still giving stock markets the jitters.
But you don't have to accept volatility. There are measures that you can take to protect your portfolio from the increased levels of volatility.
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