Short term volatility is a result of instant news and analysis, not a change in fundamentals.

We live in a world with instant news and analysis. The news cycle is short, as events have only a short term impact. This compresses volatility into larger moves in financial asset pricing over shorter time periods. We experienced this volatility in the bond market two weeks ago when intermediate and long-term bond prices dropped rapidly and yields rose by 25 basis points over five trading days. We also experienced it last week when stock prices dropped by almost 3% over two trading days.


ProBank Austin Advisor - October 16, 2018