Recently we have seen an increase in market volatility. The War in Ukraine, the post Covid recovery, inflationary pressures and interest rate rises, energy and petrol price hikes, as well as cost of living standards increasing at a higher rate than real wages, have led to a correction in the stock markets. 

 

This creates fear in the retail market, due to the uncertainty and the fact that a lot of people’s pensions and portfolios are seeing drawdowns seldomly seen during the longest bull market in history. 

 

The truth is, it doesn’t need to be this way. A lot of people’s fear of the markets is misplaced. The increased volatility can actually provide increased opportunity, as long as you know where to look and are educated on how to take advantage of these market conditions. 

 

Longer-term investment strategies are designed to withstand market corrections and drawdown periods. The risk is managed in a way that, even though you may be seeing a drawdown on your pensions and individual stock portfolios right now, when the markets recover (and this may take years – whence being a longer-term investment strategy), you will still be able to profit from the positions that are taking a hit right now. 

 

With shorter-term trading, we can take advantage of the situations in front of us right now, whether the markets are going up, down, or sideways. We just need to be able to adjust our strategies and manage our risk responsibly.