Today’s infographic serves as an introduction to the concept of volatility, along with offering a perspective on volatility’s impact on investments.
Why are certain times more volatile than others?
In the short term, volatility is driven by changes in demand, which is largely related to changes in earnings expectations. These expectations can be affected by:
Earnings reports
New economic data
Company leadership changes
New innovations
Herd mentality
Political changes
Interest rate changes
Market sentiment swings
Other events (economic, political, etc.)
Often the media and investors assign certain narratives to price changes, but the reality is that the stock market is very complex, and has many underlying factors that drive movements.
What ultimately matters for volatility is demand: if stocks move up or down on a given day, we can say definitively that demand for stock was more (or less) than stock supply.
Source: https://www.fisherinvestments.com/en-us/insights/articles/commentary/market-volatility-infographic
