Announcer:
4 Your Money is brought to you by Nelson Corp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of Nelson Corp Wealth Management. Welcome back, David.
David Nelson:
Thank you, Brandy. Appreciate it.
Brandy Auterson-Hurst:
So markets seemed calm in the first half of the year. What have you noticed on this front?
David Nelson:
Well, certainly the stock market has been much less volatile this year compared to recent years. There’s several metrics that we use to measure volatility. Probably the most common would be the VIX index. It’s often referred to as the Fear Index, because basically what it’s doing is it’s measuring as individuals get nervous and they start selling and it’s trying to hone in on that.
The chart that I brought along today, the blue line is going to give people a pretty good feel for the last 20 years as far as the VIX index and how it’s measured. And you see as far as where it is in comparison to the red line, which the red line is looking at this year, as far as what’s happened so far this year.
What typically takes place, and time will tell for certain, but this is generally the time of the year that volatility increases. And so we’ll see as far as the balance of the year as far as what takes place. But all indications are volatility that’s been low and contained, it’s probably not going to stay there as far as over the balance of the year.
Brandy Auterson-Hurst:
Okay. So what might this mean for viewers’ investments?
David Nelson:
Well, we certainly are the camp that volatility is probably going to increase. So what that really translates into, I think for most individuals out there is, as we reiterate oftentimes, and that is really focusing on what you own and how will it be impacted as far as going forward if volatility picks up.
And again, history is just one tool that we use to measure as far as what could take place. And certainly if that’s the case, volatility is going to increase as far as the balance of the year.
Brandy Auterson-Hurst:
All right, David, as always, thanks for joining us.
Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.