News & Events

Market Volatility Provides Investment Opportunity

Volatility has been a  topic of discussion lately, as markets have experienced it heavily during the third quarter. Phil Hudson and the Atlanta Business Chronicle covered this topic in the November 28, 2014 issue in the special quarterly spotlight on finance. Balentine Chief Investment Officer Adrian Cronje, Ph.D., CFA was quoted in the article “Market volatility provides investment opportunity,” discussing the potential for opportunities and also the associated risks.

Says Cronje in the article Market volatility provides investment opportunity, “The best piece of advice we give clients during such volatile times is to remind them that it brings opportunity, but the need for discipline is paramount.”

Cronje goes not to describe the three ways that this discipline comes:

  1. First, we believe that if investors have thoughtfully diversified their investment program, there is no need to think about market timing.
  2. It is always important to rebalance a portfolio through time.
  3. Remember what really has occurred over the past six years.

Cronje concluded: “Often the best way to remind investors about the importance of discipline is to set the current environment in the context of the longer-term history. In the last five or six years the stock market has delivered above average results while underlying fundamentals have delivered below average results. There has been such a almost blind chase for yield that investors have undergone to quench their thirst for yield that it’s easy to forget at some point interest rates are likely to go up again. In fact the Federal Reserve, just this month, has signaled the first part of that normalization of monetary policy by no longer buying bonds and next year’s headlines are likely to be dominated by how soon and by how much they will begin to rise short-term interest rates.”

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