Investment strategies ebb and flow in popularity. Through the 1980s and 1990s, buy-and-hold was the mantra. To be sure, some still espouse it, but others easily note that the overall markets have been flat for the past 10 years. And value investing was the main strategy for decades, until the growth guys decided they had a better way. Then the tech wreck made their new way look shortsighted.
In this changing landscape of investment trends, it seems that volatility is the new black. (Indeed, the argument that buy-and-hold hasn’t worked for the past 10 years isn’t that the market has been flat for 10 years, but rather that it has been herky-jerky around a flat trend line—in other words, volatility has been the overriding characteristic of the market). So selling at the right time has become a key point where most investors fail. And short of knowing just when to sell any given investment, diversification has become the best way to hedge against volatility. It still is, don’t get me wrong, but now there are also more ways than ever to invest in volatility itself.
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