Liz Ann Sonders, chief investment officer of Charles Schwab believes that volatility doesn’t have to be negative. Sonders thinks volatility gives investors the opportunity to re-balance their portfolio on a regular basis. The private individual should have a long term approach, not based on short term calls but on time horizon and risk tolerance. That way, the foolproof strategy of adding into weakness and trimming into strength presents itself more plainly instead of being bogged down by contrasting opinions and trying to time the market. Nobody else than your portfolio tells you exactly what to do.
The lesson: Volatility is an investor’s friend.