Investors Shouldn't Shy Away From Volatility
Rafael Resendes, co-founder of The Applied Finance Group, told CNBC’s “Squawk on the Street” that market volatility is “part of the admission to be in the game” for investors.
Long-term, he said equities return about 9% a year, doubling an investor’s money in about eight years.
“If you want the higher returns that come with equities over time, you have to be willing to take some of those swings,” Resendes said Thursday. “The S&P 500 has been around for 50 years, but if you missed the ten best months over that 600-month run, you’ve missed half the gains over the cumulative period of the index.”
Resendes said it’s impossible to know when the market will pop, citing Wednesday 2% run in mid-day trading.
“When you look at the equity markets in general you still see a very interesting story,” Resendes said. “We see private equity snapping companies up. Historically, these guys have done a good job assessing value.”