Investors Are Unprepared For The Coming Detour
May 27, 2012
With continued volatility in many of the key global markets, 40 year veteran, Robert Fitzwilson wrote this piece for King World News. Fitzwilson is founder of The Portola Group, one of the premier boutique firms in the United States. Here are Fitzwilson’s observations: “With markets becoming increasingly volatile, it is important to maintain perspective regarding what has transpired since the 2009 bottom in the equity and commodity markets.”
Robert Fitzwilson continues:
“Successful investors develop and follow an overall strategy. If one doesn’t have a strategy, it is easy to get whipsawed as volatility creates wide swings in prices. The volatility causes unprepared investors to liquidate declining holdings in a panic.
Indeed, market bottoms are usually characterized by a step-down, or ‘waterfall’ decline on heavy volume. In essence, the ‘flight’ emotion takes over and people tell their brokers and advisers to ‘get me out at any price.’ That pattern usually signals the end of an intermediate move. What serves to end the emotional panic, generally coincides with a negative effect on the person’s future financial condition….