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Your frequently asked questions on volatility answered

Historically, down markets have rebounded — these strategies can help you manage risks through today’s ups and downs, says our Chief Investment Office

VOLATILITY IS ALWAYS A CHALLENGE for investors, and so far in 2022 it has been nonstop. What’s going on? “We believe that markets are undergoing some big shifts right now as they struggle to price in inflation and come to terms with slower growth,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. “But we also believe that once inflation peaks, the volatility should ease and positive profits growth should eventually return.”

In the meantime, what can investors consider doing? “During periods of sharp volatility, markets try to anticipate and react to headlines and events. But that doesn’t mean you should,” Hyzy says. Rather than attempting to keep pace with daily fluctuations, review your long-term investment strategy, and try to remember that as a long-term investor, time is on your side. As uncomfortable as volatility can be, “what history tells us is that staying invested for the long term has paid off,” Hyzy adds.

Below, he and other members of the Chief Investment Office offer insights to help you put this year’s sometimes extreme market ups and downs in perspective, as they answer five questions advisors have been hearing from clients around the country.

Hit + after each question to see their answers and explore more resources.

Q. Should I sell some or all of my equities and revert to cash until this volatility subsides?

Q: With so many geopolitical risks right now, is it a good idea to own international stocks?

Q: What do rising interest rates mean for my fixed income investments?

Q: Why have stock and bond values been going down together?

Q: What can I do to better manage risk in my portfolio going forward?

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