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High-Risk Market Volatility and Two-strong Investor Strategy

Recent research in the United States shows that market volatility has made two camps of investors take different actions in responding to market fluctuations. A researcher from Investopedia, Amanda Morelli found that there was the fastest market fluctuation in Uncle Sam’s history. Coupled with market rallies, and the highest layoffs in America. This condition causes high volatility. The higher the volatility, the higher the risk in investment. And Morelli found that the two camps of investors, young investors, and old investors, implemented different strategies in dealing with these conditions. The recent high volatility on the American stock market does pose a high risk when investing. However, the turmoil in market fluctuations does not necessarily make investors break up. In the meantime, if you are also willing to trade in volatility 75 index, you can go to right away.

At least in Amanda Morelli’s findings, the risk has been polarized when younger investors hunt and collect the riskiest stocks in the hope of greater rewards, while older investors seek security from blue chips, money market funds, and conventional savings. Morelli found that due to high volatility, 37% of younger and riskier investors invest more money this May than March, and 39% invest more often. These young investors may see generational opportunities to buy shares at a discount and rely on the same stock market dynamics from 2010-2019 with accommodative Federal Reserve and trillions of fiscal stimulus.

Meanwhile, the older investors entering the X generation and Baby Boomers are responding to market volatility and market fluctuations by being more careful and looking for safer paths. One way to do this is by continuing to add blue chips and large technology stocks, many have bought airline shares which have unfortunately collapsed due to the COVID-19 pandemic.

Even big investors like Warren Buffett gave up on airlines, although he said in February 2020 he would hold the stock. Buffet claimed his business was damaged and eventually had to sell shares of the airline. Another with young investors, they believe shares in this sector can recover. They have time to find out. So, they are responding to high market volatility by buying more aggressively.

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