This is a Premium Post for Capital Mind Premium Subscribers, sent on March 9, 2014.
Volatility is part of all markets. Prices will fluctuate because they are supposed to. As investors it is not in our best interest to demand the lack of volatility, or to demand that prices should only go in one direction.
Oh, people have tried. The Karachi Stock Exchange, in a moment of complete lunacy, declared in August 2008 that stock prices of their top stocks could not close lower. This came after people were furious that stock prices were pummelled down, and threw stones at the stock exchange building. In that fear, a floor was set for each stock at a KSE 100 index level of 9,144. The floor then became a ceiling, as stocks refused to go up either – and the index remained there for four months. When the ban was removed in December 2008, the market fell continuously till the KSE 100 was at the 5,000 levels before it recovered.
The rest of this content is only available to premium members.
Register for a premium membership today! Apart from this content you will get our proprietary research and weekly newsletter too!
Already a subscriber? Log in now!