An Investor’s View of Volatility

In our previous article, ‘Jargon Buster: What is Volatility?’ we discussed the meaning about this rather confusing term. As this is a topic that’s so interwoven with investing, we thought it would be interesting to see what one of our clients, Gillian Keith’s, views are on the subject.

What drew you to begin investing in the first instance?

I’ve always been intrigued by the potential of the stock market. I look at it as a way to establish some kind of financial security in my life as a self-employed person.

With the markets rapidly fluctuating at present, are you worried about your investment or do you see opportunity?

Of course I’m worried about my investments because I don’t feel I have huge amounts to lose or gamble with; however I am in middle age, and still have many more years to continue investing, so I am able to accept fluctuation knowing there is plenty of opportunity to recover and gain. I understand that it can be beneficial to buy when the market is low, so there is obviously an opportunity to potentially make some significant gains when the market rises and stabilises.

Are you put off by volatility or do you embrace it?

I am nervous about volatility, but when it comes to investing, I am encouraged by those who teach me that taking risks often brings the biggest gains. I am nervous about financial security in my future, which is where my fear of volatility comes from. But so far, learning about investing and educating myself about the funds I choose has helped me to become more comfortable with risk and the inevitable volatility associated with investing.

Volatility in itself doesn’t have to be a frightening prospect. Our Investment Committee at True Potential plan ahead with our fund manager partners with the aim of mitigating increased volatility. One of the key factors which we look at within the True Potential Portfolios is risk. We look to reduce risk where we can with the use of advanced diversification.