The Great Volatility continues

by Chris Becker

Going through the archives, it seems whenever I write about volatility it tends to result in a short-term rally in, well everything. It’s not my fault, because I’m usually writing in response to market volatility spiking and/or a guru talking about volatility itself.

I might be breaking that record today because overnight we had a massive rally in Asian stocks that was then stopped and plunged in full reverse by falling US stocks on the back of “good” jobs and oil inventory data. Volatility begets volatility!

Four years ago, I penned the term “The Great Volatility” to characterise the next ten or so years of market action, which would equate to a secular bear market where equity prices basically tracked sideways or even fell in real terms. This is not unusual historically as the long term chart of Australian stocks shows after periods of very strong bull markets:

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