{"id":105559,"date":"2017-05-04T10:45:24","date_gmt":"2017-05-04T14:45:24","guid":{"rendered":"http:\/\/countingpips.com\/?p=105559"},"modified":"2017-05-04T06:45:55","modified_gmt":"2017-05-04T10:45:55","slug":"when-volatility-erupts-3-simple-ways-to-profit-from-market-gyrations","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/05\/when-volatility-erupts-3-simple-ways-to-profit-from-market-gyrations\/","title":{"rendered":"When Volatility Erupts: 3 Simple Ways to Profit From Market Gyrations"},"content":{"rendered":"<div id=\"inves-1923690256\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">May 4, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/05\/0417_volatility_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/05\/0417_volatility_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/05\/0417_volatility_feature-300x155.jpg 300w\" alt=\"When Volatility Erupts: 3 Simple Ways to Profit From Market Gyrations\" width=\"580\" height=\"300\" \/><\/p>\n<ul>\n<li>Volatility strikes fear in most investors.<\/li>\n<li>Why market gyrations can actually help your portfolio.<\/li>\n<li>3 reasons you should embrace sudden market shifts.<\/li>\n<li><strong><a href=\"https:\/\/pro.agorafinancial.com\/m\/671150\">Also recommended: What happens when you add rocket fuel to tiny stocks?<\/a><\/strong><\/li>\n<\/ul>\n<hr \/>\n<p><img decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/duip7hn7nchpo.cloudfront.net\/editor-circle-louis-basenese.jpg\" alt=\"Louis Basenese\" \/>That is because volatile markets are frequently associated with losses as asset prices gyrate.<\/p>\n<p>But believe it or not, volatility is actually a <i>good<\/i> thing for long-term investors.<\/p>\n<p>Better yet, even short-term investors can harness the power of volatility \u2014 booking massive returns in small time frames.<\/p>\n<p>Senior analyst Jonathan Rodriguez breaks down exactly why below.<\/p>\n<p>Ahead of the tape,<\/p><div id=\"inves-3162071433\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <i>Wall Street Daily<\/i><\/p>\n<hr \/>\n<h2 class=\"headline\">Three Huge Upsides to Volatility<\/h2>\n<p><img decoding=\"async\" style=\"float: left; max-width: 85px;\" src=\"https:\/\/sites.agorafinancial.com\/EMAILS\/images\/editor-circle-jonathan-rodriguez.jpg\" alt=\"Jonathan Rodriguez\" align=\"left\" \/>No matter how you trade stocks as a long investor, the basic idea is to buy stocks that will be worth more tomorrow than they are today.<\/p>\n<p>And over time, stocks have an upward bias.<\/p>\n<p>Consider that in the last 50 years, the S&amp;P 500 has returned 7% annually, including dividends.<\/p>\n<p>If you\u2019re an investor aiming to beat the market, volatility is your best friend.<\/p>\n<p>Big price swings allow investors to take advantage of temporary dislocations of a stock\u2019s current price from its \u201ctrue value.\u201d<\/p>\n<p>During these turbulent times, long investors can scoop up shares of great companies at sometimes fire-sale prices.<\/p>\n<p>Or by positioning themselves just right, investors can get into stocks primed to pop \u2014 and let a volatile market hand them profits.<\/p>\n<p>Here are three examples of how you can get in on the action\u2026<\/p>\n<h3><u>Volatility Play #1 \u2014 Earnings Reports<\/u><\/h3>\n<p>As you may know, for an individual stock, the most volatile periods are always around its quarterly earnings reports.<\/p>\n<p>Investors get four reporting opportunities a year on thousands of publicly traded stocks to position themselves for big profits.<\/p>\n<p>Let\u2019s say a fundamentally sound company that\u2019s growing sales and earnings well over the period of several years reports a bad quarter and its stock drops 5%.<\/p>\n<p>If the quarter represents a short-term misstep, then investors are looking at a 5% discount on a quality stock.<\/p>\n<h3><u>Volatility Play #2 \u2014 Natural Disasters<\/u><\/h3>\n<p>Mother Nature is one of the single most powerful forces on Earth.<\/p>\n<p>Natural disasters such as hurricanes, earthquakes and volcanic eruptions move stocks \u2014 fast.<\/p>\n<p>It\u2019s not just weather disasters that disrupt share prices, either.<\/p>\n<p>The deadly Ebola outbreak of 2014\u201316, for example, claimed the lives of more than 11,000 people in Africa.<\/p>\n<p>Between September and October of 2014\u2014 the peak of the outbreak \u2014 the S&amp;P 500 fell 8%.<\/p>\n<p>Shares of American Airlines Group Inc. \u2014 America\u2019s largest airline company \u2014 fell 30% from their September 2014 peak to their October 2014 low.<\/p>\n<p>To put that into perspective, the plunge was more than three standard deviations from the stock\u2019s 50-day moving average at the time.<\/p>\n<p>But a savvy investor who bought the American Airlines dip in October would have made an 86% gain on the shares by the end of the year as the stock recovered.<\/p>\n<h3><u>Volatility Play #3 \u2014 Takeovers<\/u><\/h3>\n<p>Thus far, we\u2019ve covered two great ways to pick up stocks at a discount after a big move to the downside.<\/p>\n<p>But one of the best ways to bag a big gain quickly is to be ahead of the move.<\/p>\n<p>And there are few catalysts more powerful than mergers and acquisitions.<\/p>\n<p>2016 was the third-largest year for global M&amp;A, with $3.7 trillion worth of transactions made.<\/p>\n<p>Companies that make for attractive takeover targets can see a one-day rise of anywhere from 20\u201360% in their stock on the announcement of a deal.<\/p>\n<p>For instance, Intel Corp. struck a $15.3 billion deal to buy semiconductor company Mobileye NV in March.<\/p>\n<p>Mobileye\u2019s stock soared 13% on the day the deal was announced.<\/p>\n<p>And with a huge tax cut on the Trump administration\u2019s legislative agenda, the next two years could be record-breaking for takeovers.<\/p>\n<p>Bottom line: Investors should embrace volatility, rather than run from it. Some of the largest gains ever harvested will come from buying the dips \u2014 or being ahead of the pack on a major market-moving event.<\/p>\n<p>On the hunt,<\/p>\n<p>Jonathan Rodriguez<br \/>\nSenior Analyst, <i>Wall Street Daily<\/i><\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/05\/04\/volatility-erupts-3-simple-ways-profit-market-gyrations\/\" rel=\"nofollow\">When Volatility Erupts: 3 Simple Ways to Profit From Market Gyrations<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com Volatility strikes fear in most investors. Why market gyrations can actually help your portfolio. 3 reasons you should embrace sudden market shifts. Also recommended: What happens when you add rocket fuel to tiny stocks? That is because volatile markets are frequently associated with losses as asset prices gyrate. But believe it or not, [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-105559","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/105559","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=105559"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/105559\/revisions"}],"predecessor-version":[{"id":105567,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/105559\/revisions\/105567"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=105559"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=105559"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=105559"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}