A survival guide for early 2022's sharp market swings
Embrace volatility which goes hand-in-hand with stocks; it is the price investors pay for high long-term returns
JANUARY'S sharp, downward movements have most questioning the bull market's viability. Not me. Yes, since year-end, global markets - especially growth-orientated ones - tumbled and flirted with official "correction" territory. Certainly, stocks may keep gyrating in the short run. But 2022 should still deliver good-to-great returns. January's swoon tests investors' mettle, from Bishan to Boston. To pass muster, here is my volatility survival guide.
Last month, I told you 2022's mid-year combination of US political gridlock and fading global fears spelled a great year for world stocks - but with a rocky, grinding first half to endure.
I didn't envisage stocks' immediate January global drop. Nor did I predict the 5 per cent jump in the defensive and value-heavy Straits Times Index (STI). But short-term wildness like January's is the price that investors routinely pay for stocks' high long-term returns. Volatility and stocks go hand-in-hand. Embrace it. You can't control the market; only how you react.
