Sources Of Volatility
As the world hopes to move past the COVID-19 pandemic, there are many concerns about how the "new normal" will impact the economy. Movie theatres, restaurants, and other mass gathering-based businesses might experience some initial customer reluctance, even after the all-clear. Other businesses may be impacted by the timeline of the eventual recovery from the economic impacts of the coronavirus. In addition to the recent election, there are several potential policies or impacts on consumer confidence that could cause the financial markets to shake.
Diversification protects investors from volatility by spreading the risks. However, it isn't always enough to invest in different stocks. For some investors, the key is to allocate funds to radically different funding mechanisms. Stocks, mutual funds, and bonds are all common investment tools, but there are many others.
Commodities such as gold or silver are also very popular investment tools. Gold, in particular, withstood the volatility of the 2008 market and has continued to grow in the decade since. Crude oil is another popular investment commodity. It is also possible to hold foreign currencies and other physical items such as works of art in the hopes of higher future market prices.
