Dealing With Volatility – Matthews Asia

Dealing with Volatility by Robert Horrocks, PhD, CIO – Matthews Asia

There has been much concern over market turmoil recently, which begs the question: how do investors deal with volatility? I’ve come across several different reactions to it over the years. One reaction is tactical: investors’ views are created and destroyed in an instant. The other is strategic: an investor has convictions that he or she may frequently test, but to which he stays true until they are proven false.

Our view on volatility at Matthews Asia falls between the two, but is far closer to the patient-and-strategic approach. There are times to be tactical, for sure. But they are easily overdone. I’ve heard managers of huge sums of...