ARBOR OUTLOOK: Arkansas snow, SoWal rain and gyrating markets

Published: Thursday, July 11, 2013 at 04:24 PM.

But this is only the latest example. The VIX, or level of volatility, has been rising steadily since 2008. Torrid volatility characterized 2011. In early August of that year, the market dropped 635 points in one day, the largest single day nosedive since 2008. What Andrew Ross Sorkin in the New York Times called “intractable problems” in the EU was part of the volatility equation. Now, a not-so-soft landing in China is significantly impacting global markets. 

It is a documented economic tenet that markets overreact to bad news and under-react to good news, so extreme volatility requires investors to prep their portfolios with downside protection, such as dividend paying equities. Dividend payers which have increased their shareholder dividends also serve as a hedge against inflation. 

As Chairman Bernanke inevitably edges forward with future QE tapering, markets are likely to remain volatile.

When it rains, it pours.

Margaret R. McDowell, ChFC,, AIF, a syndicated economic columnist, chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (, a fee-only registered investment advisory firm located near Sandestin. Arbor Wealth specializes in portfolio management for clients with $250,000 or more of investable assets.


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