Michael J Porro & Company

Financial Advisors, LLC

180 Old Tappan Road, Old Tappan, NJ 07675-7052

Phone: 201-768-0218

Fax: 201-768-6487

Website: porrofinancialadvisors.com

July/August 2018

Surviving Volatility

Investment volatility can be scary, but you can better weather stock market and interest rate volatility when you follow a comprehensive investment strategy that takes into account your goals, risk tolerance and time horizon. Here’s what you need to know about volatility.

Vexing VIX
You can get an idea about how volatile the stock market is by checking out the Chicago Board Options
Exchange (CBOE) Volatility Index® (VIX®). The VIX measures stock market risk based on estimates of S&P 500® index* option prices over the next 30 days. The higher the number, the more volatility.


Rate Volatility
Volatility in the fixed income market is usually not as dramatic as you’ll find during turbulent stock market trading days. Still, when interest rates move either up or down, bonds and other fixed income investments will often see a correlated change in rates.


Mutual Funds
If you own fixed income investments and hold them to maturity, interest rate fluctuations won’t affect you. If, however, you try to trade them before maturity as rates are rising, you could lose money. That’s why bonds may guarantee an interest rate held to maturity, but mutual funds** — which trade their securities often — offer no such guarantees.


So how do you deal with volatility in your portfolio? Stay the course if you’ve prepared for the possibility ahead of time, and work with an advisor to keep pace with market and interest rate changes.


*You cannot invest directly in an index.
**You should consider the fund’s investment objectives, charges, expenses and risks carefully before you invest. The fund’s prospectus can be obtained from your financial representative and contains this and other information about the fund. Read the prospectus carefully before you invest or send money. Shares, when redeemed, may be worth more or less than their original cost.



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Michael J Porro & Company and LTM Client Marketing, Inc. are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

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