"Without volatility, there would not be the opportunity to acquire stocks at low prices," DeShurko said. "Market volatility is always the friend of the patient investor. Studies show that when you buy stocks is very important. For an income and value strategy, buying into positions at a low price is imperative."Meanwhile, Long Term GARP portfolio manager Yale Bock told Main Street that the reason volatility can be good for an average investor’s portfolio has to do with the premise, which was originated by Ben Graham, the father of value investing, of buying assets at lower prices when other investors sell them at discounted prices versus their underlying ability to generate cash.
"An investor can take advantage of these situations by buying the stocks of companies which have a long track record of growth in cash flow, net income and operating income or when the underlying assets of a company are not being given credit based on stock price," he said.
Since owning equities can benefit an investor for several generations, when a volatile market occurs, consumers should take a look at their favorite companies and research their stocks, Bock said.
Read the full article at Main Street.
The post Is volatility really such a bad thing for investors? appeared first on Smarter Investing Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.