Vantage Point: Volatility  

Equity investing at a time of higher volatility

  • To understand the different influences on the present high level of volatility
  • To discover what happens to market volatility in wartime
  • To understand the impact of higher commodity prices on market volatility levels
CPD
Approx.30min

The changing central bank backdrop means that bonds will not necessarily offer the same protection to shocks that they did in the past and thus we would be cautious about taking too much duration risk. 

Finally, as investors we must work even harder to avoid mistakes as higher volatility means the consequences of being wrong are greater; opportunities abound but risks have increased. 

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Stephanie Butcher is chief investment officer, and Benjamin Jones is director of macro research at Invesco. 

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Why does Butcher say the increased volatility associated with wartime dissipates quickly?

  2. What two areas do the authors say will be subject to huge change in the coming years?

  3. What do the authors say would largely have hurt portfolios over the past decade?

  4. What do the authors say is suppressing volatility in bond markets?

  5. What do the authors say is happening in politics?

  6. What is the likely impact of quantitative tightening?

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You have successfully answered all the questions correctly, well done!

You should now know…

  • To understand the different influences on the present high level of volatility
  • To discover what happens to market volatility in wartime
  • To understand the impact of higher commodity prices on market volatility levels

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