Chart: Election impacts on market volatility

[ "Blog: Latest Insights" ]
[ "Equity", "Manage Volatility", "Market Technicals & Volatility" ]
[ "Columbia Threadneedle Investments" ]
  • Chart on the Go

Download PDF

Equity market expectations for volatility around the election are elevated, but not extreme. Investors should stay focused on their future goals.

 

  • By tracking measures of volatility, we can understand whether the equity market expects to see a high level of market action in response to the election.
  • Expectations for volatility are elevated relative to the last 15 years — but they aren’t extreme. For investors, the smart move is to stay focused on long-term goals because decisions made in the heat of the moment can hurt future portfolio performance.
  • A diversified portfolio can help dampen the impact of equity volatility by introducing stabilizing investments such as shorter term bonds or U.S. Treasuries. Active management can also help limit portfolio volatility because portfolio managers make research-backed decisions about what companies to hold or avoid in a volatile market.

Download as client-approved PDF