Continued Volatility

Oct 23
Bespoke Investment had a good post Welcome Q4 regarding the volatility over the course of the last few months.  Basically we are in a tight trading range but with action that would make you nauseas.  As the note points out, the average daily movement of the S&P has been +/- 1.9%.  This makes it even hard for trading professional to make money.
To me this data points out the critical importance of knowing what you own and why.  Having conviction in a market like this is tough but will also help you sleep better at night.  It can also open up small but quick pockets of opportunities to build on current positions and pick up stocks currently on your watch list.
This also brings up a good point about have reserves which benefits you in two ways.  As the markets wip saw back and forth with a downward trend it helps protect your portfolio.  Second it leaves you the opportunity to pick up positions at reduced entry points.  Cash id definitely not trash in this market environment.

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