Historically speaking, when short term volatility occurs, it rarely lasts and markets have corrected themselves and still trend upwards.
In short, volatility begets volatility, because volatility generates stress.
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The recent increase in volume is accompanied by an explosion in volatility: The CBOE Nasdaq Volatility Index, reflecting short-term expectations of volatility in the Nasdaq 100 Index, surged to 80 from 20 or so between mid-2006 and October of last year.
But do not expect Mr Bernanke to bend to the demands of overextended investors suffering through short-run volatility.
Investors in small-cap stocks have traditionally hoped to earn higher long-term returns at the price of greater short-term volatility.
Market action is ultimately out of your control but as investors we can learn how much short- term volatility we can live with and adjust our portfolios accordingly.
Bernstein analyst Steve Powers said Coca-Cola and Pepsi are known to be conservative when it comes to buying and hedging commodities risk, making them less subject to short-term volatility.
Last week on CNBC, John Silvia, chief economist for Wells Fargo Securities, asked me how, as a disciple of asset allocation, I help my clients focus on the long-term goal in the face of such dramatic short-term volatility.
Short-term volatility is seldom a factor.
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Although some active managers may experience more short-term volatility and higher tracking error with their benchmarks, this growing trend should lead investors to look to active managers with long-term track records of strong risk-adjusted performance, as I foresee on-going attractive equity returns in the years ahead.
Countrywide Financial told investors Monday to expect short-term earnings volatility as it tightened its underwriting standards.
No wonder then that investors are also uncertain, as reflected by the extreme short-term market volatility.
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That put Goldman short on the equity volatility index just as those indexes spiked through the roof.
Luciano uses price, volume, big block trades, volatility, short sales, along with psychological factors including fear, safety and greed.
Short-term currency volatility is a fact of life, and is hard to prevent.
This is followed, in most cases, by a snap move right back up following a short period of downside volatility.
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Countrywide Financial (nyse: CFC - news - people ) told investors Monday to expect short-term earnings volatility as it tightened its underwriting standards.
Another 800 million shares will be released from lockup on November 14th and in the short term that spell volatility for Facebook stock, says Mike Tarsala, a chartered market technician at Covestor, said.
In addition, procedures to halt trading if prices show too much volatility in a short period of time have been implemented since the flash crash occurred in 2010.
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Italy's market regulator intervened in a bid to quell volatility by temporarily suspending short-selling of shares in Intesa Sanpaolo.
If your time horizon is short or your ability to stomach volatility is low, brace yourself for the possibility of more extreme volatility.
"In the short term there will be price volatility and political backlash, but the long term trend is fairly clear: undertaking reductions now is significantly cheaper than inaction, " says Karmali.
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While leveraged volatility ETNs do come closer to replicating the actual performance of VIX, these instruments are really only effective when held for short periods of time (as volatility lag eats away at the returns over time).
One important observation: it is striking how far equity market volatility has fallen in three short months.
Trading volatility has become possible through vehicles based off the Chicago Board Options Exchange Market Volatility Index, or VIX for short.
Earlier this month, regulators announced a ban on short-selling until November after the global market volatility caused a six-day sell-off.
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