Tag - risk and volatility

Advice to the Advisors

Warren Buffett Lesson on Risk and Volatility | Sheaff Brock Institutional Group

The Lesson Many of Your Clients Were Never Taught

“That lesson has not customarily been taught in business schools,” Warren Buffett observes, referring to the concept that “Volatility is far from synonymous with risk.” In a 2015 letter to shareholders, the Berkshire Hathaway CEO wrote about the difference between risk and volatility. Many investors, he observes, “conflate these concepts, costing themselves money.” Of course, the fact that stock prices will always be far more volatile than cash-equivalents must play a part in any advisor-client discussions of portfolio design. But, [...]

Advice to the Advisors

Market Volatility Roller Coaster Ride | Sheaff Brock Institutional Group | Advice to Advisors

At the End of the Day, Market Volatility can be Bullish

“Somewhere along the line, the word ‘volatility’ became code for a declining stock market,” Robert Burgess notes in Financial-Planning.com. “The simple fact is the recent swings are closer to what is considered normal, and investors should be thankful,” Burgess asserts. Rising volatility, he predicts, will lead to a healthier market, with better “price discovery,” which is a fancy way, he states, of saying greater differentiation in the values between good and bad stocks. It may be time to have “the [...]