Beware of volatility - a durable decline is likely to come

STOCK market swings do not matter to most investors, precipitous drops in prices are acceptable if they are followed by sharp rises, and this remains true no matter how long the phase of heightened volatility.

If the above is your investing credo, you can ignore another roller-coaster week in markets, in which the major indices fluctuated wildly, including intraday. On Thursday, for example, the Dow closed 227 points higher after falling more than 360 points on Wednesday. And the sessions were wild on both days.

But volatility does matter to investor positioning, risk appetite and the formation of price expectations. And the longer it lasts, and especially if it is the "volatile volatility" of recent weeks, the more likely it is to be accompanied by a durable decline in markets overall.