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Larry Fink’s Take on Market Volatility

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Apr. 20 2018, Updated 9:45 a.m. ET

Larry Fink on market volatility

Larry Fink, the legendary investor and chair of BlackRock (BLK), said that investors should stay invested in the equity market rather than trying to time the market.

He also shared his concern about market volatility in the interview. He said, “Volatility did change the whole dimension of the markets.” Volatility has been playing a major role in the present market movement. The market moves in the opposite direction as volatility.

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VIX versus S&P 500 Index

The broader market S&P 500 Index (SPY) rallied 24.5% between November 8, 2016, and April 19, 2018. The CBOE Volatility Index made its record low in November 2017. Throughout 2017, volatility remained at a lower level. In February 2018, the S&P 500 Index showed a strong correction and fell 3.8% in that month. Between January 21, 2018, and February 4, 2018, the VIX Index spiked 162% as the market started to decline gradually during this time period.

The sudden and huge rise in the volatility index is raising concern about the market movement in investors’ minds. Although the market fell a small percentage during this time period, the VIX index is signaling that the market might see more downside risk.

In the next part, we’ll look at Larry Fink’s view on the bull market.

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