Tuning Out the Noise

After a period of relative calm in the markets, October's increase in volatility in the stock market has resulted in renewed anxiety for many investors.

From September 21st through October 24th, the S&P 500 has fallen approximately 9.4%, resulting in many investors wondering what the future holds and if they should make changes to their portfolios. While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing. Additionally, for long-term investors, reacting emotionally to volatile markets may be more detrimental to portfolio performance than the drawdown itself.

While market volatility can be nerve-racking for investors, reacting emotionally and changing long-term investment strategies in response to short-term declines could prove more harmful than helpful. By adhering to a well-thought-out investment plan, ideally agreed upon in advance of periods of volatility, investors may be better able to remain calm during periods of short-term uncertainty.

In times like these, it is important to bring out your noise cancelling headphones and "tune out the noise" as the following video highlights.

Jonathan Darabos