Volatility provides buying opportunities, as investors panic sell and then buy after the inch higher.
Investors were complacent leading up to last week due to low amounts of volatility experienced the past two months. The sell-off caught almost everyone by surprise. But these are a normal function of the market. Over the past 90 years the S&P 500 has had a 5% decline around every 2 months with a 10% drop every 6 months. Large intra-year pull backs are also normal. Since 1980, the S&P 500 has had intra-year declines of almost 14% while still posting a yearly gain 75% of the time.
Higher volatility is here to stay as investors grapple with what higher interest rates and inflation mean for their portfolios.
Investors should look for share trading on large negative standard deviations for opportunities. Below are shares investors can look to add to their portfolios. Aspen, Imperial, Tiger Brands, Coronation and Quilter look attractive at these levels.
Movers and Shakers