Equity market returns are influenced by many factors in the short term, such as daily corporate news, external factors like economic growth, interest rates, and domestic and global events that can impact market sentiment. As a result, prices of individual stocks see fluctuations. Frequent ups and downs, or volatility, can cause investors some distress.
Wealth and asset managers have several ways to manage volatility without materially impacting returns. Such strategies are not for the average retail investor. They work better for high net-worth individuals (HNIs), who invest lump sums into high-risk assets and need a cushion in the portfolio when markets get too volatile.
