While volatility products can claim a large share of the responsibility for Monday’s downturn in equity markets, Thursday’s session showed that interest rates still influence the pricing of risky assets.
Market volatility is rarely a good reason to abandon a sound long-term investment strategy. While sudden turbulence may cause investors anxiety, there are several ways investors can use volatility to their advantage and position themselves for longer-term success.
Emerging markets have become volatile in recent months due to the conflict over global trade, especially as it becomes a showdown between the U.S. and China. Both rhetoric and action on this front have been and may continue to be highly unpredictable.